© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
Get ready for some insights from the head of the Russian central bank! Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
How has the bank been responding to inflation? The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
When will the rate cuts happen? According to Nabiullina, it was not yet clear when exactly the regulator would start cutting rates. “We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
So, what indicators is the bank considering? Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
How long will this take? “This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
When is the next meeting? The bank will next convene to set its benchmark rate on Feb. 16.
Any regrets? The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.