Decrease in inflation opens path for less stringent monetary measures, according to Finance Ministry.
New Article:
Russia's Slowdown in Inflation Gives Central Bank Tactical Choices
In a lecture at the Financial University, Russian Finance Minister Anton Siluanov dropped a bomb: the country's recent inflation slowdown has opened a window for the Central Bank to reconsider its monetary policies. He mentioned the current opportunity arises from the reduced inflation dynamics, allowing the Central Bank some wiggle room to tinker with policy tightness.
"Things have been looking up lately, and it's great to see the Central Bank with some options on their table now," Siluanov explained, speaking to the media after the lecture (quote via Interfax).
He attributed the cooling Russian economy to the anti-inflation battle, a fight sustained by a high key rate. But, he reassured, the economic slowdown was expected and part of Russia's cyclical nature.
"We've been planning this. This isn't an emergency, just another ebb and flow. After we recover from this phase, we'll get the ball rolling again," Siluanov highlighted, emphasizing that nothing scary was expected.
Of note, the Bank of Russia's key interest rate stands at 21% following the April meeting of its Board of Directors. The next scheduled discussion on the rate is set for June 6.
While Siluanov's specific statements regarding anticipated monetary policy shifts from the Central Bank remain vague, it's known that the Bank adheres to inflation targeting, aiming to conserve inflation close to 4%. Recent updates suggest the Central Bank might tweak its rhetoric during the next meeting, as suggested by pending adjustments to interest rates [5].
By Natalia Petrova, Moscow
© 2025, RIA "Novy Day"
Enrichment Insights:*- The Bank of Russia continues to aim for an inflation rate of 4%.- The Central Bank is expected to make adjustments to its interest rate at the June 6 meeting, and may also change its rhetoric accordingly.- The Bank's decision-making process takes into account broader macroeconomic conditions and the state of financial markets.
In light of Russia's inflation slowdown, the Central Bank now has opportunities to reassess its monetary policies within the business and finance sectors. The Bank of Russia, under the influence of this reduction in inflation dynamics, might adjust its interest rate during the upcoming meeting on June 6, potentially modifying its rhetoric as well.
