The Central Bank left the rate at 7.5% and did not give a signal about easing • The Bell • RIMA

The Central Bank left the rate at 7.5% and did not give a signal about easing

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The Bank of Russia, in line with expectations, did not change the key rate , leaving it at 7.5% per annum. However, the regulator stated that "the dynamics of economic activity is better than the October forecast."

The main signal of the Central Bank is an indication of the possibility of tightening monetary policy: “if pro-inflationary risks increase, the Bank of Russia will evaluate the feasibility of raising the key rate at the next meetings.”
The Central Bank acknowledged the acceleration of current inflation, but noted that it occurs due to volatile components, and "in terms of sustainable components, the current price growth rates remain moderate." The Central Bank kept its inflation forecast: taking into account the ongoing monetary policy, “annual inflation will be 5.0–7.0% in 2023 and return to 4% in 2024” .
The decline in GDP in 2022 was 2.5%. “Live data in late 2022 and early 2023 indicate that the dynamics of business and consumer activity, as well as foreign trade, are better than the October forecast of the Bank of Russia,” the regulator writes.
The Central Bank predicts GDP dynamics in the current year in the range from minus 1% to 1% and 0.5–2.5% in 2024.
The Urals oil price forecast for 2023 has been lowered to $55 per barrel from $70 in October.

This week, Bloomberg wrote that the government is pressuring the Central Bank to ease monetary policy and, in any case, signal that the rate will fall this year at a meeting on Friday. However, there are no signs of this in the release of the Central Bank. On the contrary, “in the event of an additional expansion of the budget deficit, pro-inflationary risks will increase and a tighter monetary policy may be required to return inflation to the target in 2024 and maintain it near 4% in the future,” the regulator believes.