On 16 September 2022, the Bank of Russia Board of Directors decided to cut the key rate by 50 basis points to 7.50% per annum. Current consumer price growth rates remain low, contributing to a further slowdown in annual inflation. This is due to both the influence of a set of one-off factors and subdued consumer demand. Developments in business activity are better than the Bank of Russia expected in July. However, the external environment for the Russian economy remains challenging, invariably putting significant constrains on economic activity. Inflation expectations of households and price expectations of businesses remain elevated.
Annual inflation declined in August to 14.3% (after 15.1% in July); according to a 9 September estimate, it is down to 14.1%.
Monetary conditions continued to ease, and the Bank of Russia views them as overall neutral. Following the July decline in the key rate, yields on short- and medium-term OFZs decreased. Yields on long-term OFZs did not change significantly. There was a further drop in loan and deposit, especially short-term, rates.
The Bank of Russia Board of Directors will hold its next rate review meeting on 28 October 2022.
*press-center of Bank of Russia