The Bank of Russia will consider further opportunities for cutting key rate, taking inflation risks into account.
The press service of the bank explained that the dynamics of inflation and emerging revival of economic activity generally correspond to the baseline forecast of the Central Bank. The monetary conditions will remain tight. "Real interest rates in the economy, with inflation expectations factored in, will stay at a level which guarantees credit demand while not increasing inflationary pressure, and will maintain stimulus for saving," the statement says.
The annual rate consumer prices growth will be less than 5% in July 2017 and will reach the target level of 4% at the end of 2017. At the same time, according to the Bank of Russia, the annual rate of consumer prices growth as of July 25 fell to 7.2%.
The regulator also notes that the risks of inflation not reaching the target level of 4% in 2017 remain. "Coupled with external risks, this is mainly due to ongoing inflation expectations, uncertainty in specific measures of budget consolidation, including pension and salary hikes adjusted to inflation," the message notes.
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