The Central Bank reduced the key rate to 4.25%

On July 24, the Bank of Russia reduced the key rate by 0.25 percentage points, to 4.25% per annum, and did not rule out further decline. The market expected a greater decline - by 0.5 percentage points.

The Bank of Russia reduced the rate from 4.5% to 4.25% - this is a new historical minimum. According to the regulator, the ezinflation factors continue to have a significant impact on inflation, but after the decrease in May-June, inflationary expectations of the population and business were stabilized.

The Central Bank expects that, taking into account the conducted monetary policy, annual inflation will reach 3.7–4.2% in 2020, 3.5–4.0% in 2021 and will be near targeted 4% in the future.

The Central Bank predicts an unstable restoration of the economy and reduction of GDP by 4.5–5.5% in 2020. “In the future, the restoration growth of the Russian economy is predicted by 3.5–4.5% in 2021 and 2.5–3.5% in 2022,” the regulator writes.

They talk about it

On June 19, the Central Bank reduced the rate immediately to the interest point, from today's meeting, most analysts were waiting for a decrease by 0.5 percentage points. BOFA analysts predicted that the Central Bank would reduce the rate by 0.5 percentage points. And this will stop softening.

Decrease by 0.25 percentage points The economist of VTB Capital and the CIS, Alexander Isakov, and the chief economist of Alfa-Bank Natalia Orlova, predicted. According to Isakov, the Central Bank prefers to wait for the prices for the mitigation of the DCP. Orlova indicated that the regulator would look more like inflation, but at the dynamics of real disposable income, which in the second quarter decreased by 8%.