ST. PETERSBURG, 4 July – PRIME. At a board meeting in July, the Bank of Russia will consider reducing the key rate, the Governor Elvira Nabiullina told reporters at the International Financial Congress.
“The GDP figures that came out recently are rather weak, with a decline in investment demand and weak export growth. And when we meet in July – this is not the final meeting and we will not completely revise the forecast – but we will of course consider the impact the new figures have on the forecast,” she said.
“Although we often adopt and endeavour to adopt decisions at final meetings, I have already said that if there is every reason to adopt a decision at meetings other than the final meeting, we are prepared to do it. And in July we will also consider lowering the interest rate,” she said.
In addition, Ms. Nabiullina said that at the next meeting of the Board of Directors of the Bank of Russia to be held in July, they will discuss cutting the key rate by half a percentage point, although in general the regulator prefers to make small moves on the key rate.
In June, for the first time in 2019, the Bank of Russia lowered the key rate by 0.25 pp to 7.5% per annum. Then the regulator indicated that it may further reduce the key rate at one of the next meetings of the Board of Directors, and undergo the transition to a neutral monetary policy by mid 2020.
“Although I always say that we prefer to make small moves, albeit more often, we nevertheless cannot exclude an overall cut of 50 pp. I have already said that we considered this at the last meeting and for sure we will consider this option too this time round,” said Ms. Nabiullina.