The Central Bank of Russia decided to decrease its key interest rate from 11.5% to 11% p.a. By Ksenia Liskina, Relationship Manager, GSS Russia Considering the mitigation of inflation risks and having in mind the persistent risks of considerable economy cooling, in April-July 2015, the Bank of Russia (CBR) cut the key rate by a total of 3 percentage points. CBR considers that cutting the key interest rate will stimulate business and make loans more affordable for legal entities and individuals.
The Bank of Russia will be ready to lower the key rate further as inflation continues to decline in line with the forecast, although the potential of monetary policy easing will be limited by inflation risks in the next few months.
The Bank of Russia implements monetary policy through an inflation targeted regime and sees price stability, albeit sustainably low inflation, as its priority. The monetary policy affects the economy through interest rates, its main parameter being the Bank of Russia key rate.
Despite the fall in loan rates witnessed after the cut in the key rate, they continue to be relatively high and non-price lending conditions keep tightening.