The Bank of Russia may increase its estimate of the neutral key rate – Real estate |

Moscow. 26 April. INTERFAX – The Central Bank of the Russian Federation may increase its assessment of the neutral range of the key rate when preparing the main directions of the unified state monetary policy (MP), Bank of Russia Chairman Elvira Nabiullina said at a press conference on Friday.

“We will update, and perhaps increase, the estimate of the neutral key rate when preparing the main directions of monetary policy,” Nabiullina said.

Currently, the neutral rate level is estimated at 6-7%. The Central Bank usually publishes the draft main directions of monetary policy in August.

Let us remind you that at a meeting on Friday, the Central Bank of the Russian Federation for the third time in a row decided to keep the key rate at 16% per annum. As Nabiullina said, at a meeting of the Board of Directors, opinions were expressed in favor of her promotion.

“The overwhelming majority of participants were in favor of maintaining the rate. At the same time, everyone agreed that the space for reducing the rate had decreased. But there were also individual opinions on raising the key rate,” said the head of the regulator.

According to her, in the base scenario, the Central Bank of the Russian Federation will begin to reduce the rate in the second half of the year.

“In the baseline scenario, the cumulative increase in the key rate will be enough to return inflation to levels close to the target by the end of this year. This development assumes that the key rate will begin to be cut in the second half of the year. Exactly when this will happen depends on the speed of the slowdown in current growth prices,” she said.

If disinflation is too slow, the Central Bank does not rule out maintaining the current key rate, but this is not the base scenario, Nabiullina added.

“We believe that by the end of the year the current rate of price growth, meaning the monthly rate (seasonally adjusted – IF), will be at the level of 4% (in annualized terms – IF) or even lower,” she said.

“As for the question of when a rate cut is possible, it depends on the speed of disinflation,” the head of the Central Bank commented on the question of whether the increase in the Central Bank’s inflation forecast for 2024 to 4.3-4.8% from 4-4.5% means a postponement the most likely date for the rate reduction to begin from the 2nd quarter to the 3rd quarter.

“It all depends on how this will happen in the coming months. And we do not name a specific point – the second, third quarter (of a possible rate reduction – IF). Once again, if disinflation is very slow, then it is possible that the rate will be maintained until the end of the year “, she explained the position of the Central Bank.

The next meeting of the Board of Directors, at which the issue of the level of the key rate will be considered, is scheduled for June 7, 2024.

Read all the most interesting things in our telegram channel.