The Bank of Russia is considering potential monetary easing starting from the second half of next year, Governor Elvira Nabiullina said.
“As soon as inflation and inflation expectations show they’re slowing, we’ll be ready to ease monetary policy,” Nabiullina told lawmakers in Moscow today.
“According to our estimates, that will be possible in the second half of the year.”
Policy makers have raised their key rate by 400 basis points since March to rein in inflation at a three-year high, ignited by a ruble selloff and the exchange of sanctions imposed with the U.S. and its allies over the Ukrainian crisis.
The currency is the world’s worst performer this year after the Ukrainian hryvnia, with oil prices at a four-year low and the risk of more punitive measures as Russia’s intensifying standoff with its Cold War foes.
The ruble has lost more than 22 percent against the dollar in the past three months, the most among more than 170 currencies tracked by Bloomberg. It weakened 0.8 percent to 46.6450 per dollar as of 2:51 p.m. in Moscow.
Consumer prices rose 8.3 percent in October from a year earlier, accelerating from 8 percent in September, the fastest since July 2011. The central bank’s medium-term target is 4 percent.
‘Played Out’
“We expect inflation will start to slow from the second quarter of 2015 after the measures we have taken,” Nabiullina said. “By that time the impact of temporary factors, that led to inflation growth, will be played out.”
Policy makers raised the key rate to 9.5 percent from 8 percent last month, surprising all 31 economists surveyed by Bloomberg. Tighter monetary conditions haven’t offset the impact of the weaker ruble, and a ban on a range of food imports imposed in August, the central bank said Oct. 31.
The regulator tightened monetary policy in defiance of calls to cut borrowing costs as the economy of the world’ biggest energy exporter is growing at the slowest pace since a recession in 2009.
Gross domestic product rose 0.7 percent in the third quarter from a year earlier. There’s a 70 percent chance of a recession in the next 12 months, according to the median estimate of 27 economists in a survey Oct. 30.
That’s the highest since Bloomberg started tracking the figure two years ago, up from 60 percent last month.
“We won’t fight inflation at the expense of the economy,” Nabiullina said. “Strategically, we must reduce inflation to cut rates. Low inflation creates predictable financial conditions, which are necessary to carry out investment projects.”
bloomberg.com
“As soon as inflation and inflation expectations show they’re slowing, we’ll be ready to ease monetary policy,” Nabiullina told lawmakers in Moscow today.
“According to our estimates, that will be possible in the second half of the year.”
Policy makers have raised their key rate by 400 basis points since March to rein in inflation at a three-year high, ignited by a ruble selloff and the exchange of sanctions imposed with the U.S. and its allies over the Ukrainian crisis.
The currency is the world’s worst performer this year after the Ukrainian hryvnia, with oil prices at a four-year low and the risk of more punitive measures as Russia’s intensifying standoff with its Cold War foes.
The ruble has lost more than 22 percent against the dollar in the past three months, the most among more than 170 currencies tracked by Bloomberg. It weakened 0.8 percent to 46.6450 per dollar as of 2:51 p.m. in Moscow.
Consumer prices rose 8.3 percent in October from a year earlier, accelerating from 8 percent in September, the fastest since July 2011. The central bank’s medium-term target is 4 percent.
‘Played Out’
“We expect inflation will start to slow from the second quarter of 2015 after the measures we have taken,” Nabiullina said. “By that time the impact of temporary factors, that led to inflation growth, will be played out.”
Policy makers raised the key rate to 9.5 percent from 8 percent last month, surprising all 31 economists surveyed by Bloomberg. Tighter monetary conditions haven’t offset the impact of the weaker ruble, and a ban on a range of food imports imposed in August, the central bank said Oct. 31.
The regulator tightened monetary policy in defiance of calls to cut borrowing costs as the economy of the world’ biggest energy exporter is growing at the slowest pace since a recession in 2009.
Gross domestic product rose 0.7 percent in the third quarter from a year earlier. There’s a 70 percent chance of a recession in the next 12 months, according to the median estimate of 27 economists in a survey Oct. 30.
That’s the highest since Bloomberg started tracking the figure two years ago, up from 60 percent last month.
“We won’t fight inflation at the expense of the economy,” Nabiullina said. “Strategically, we must reduce inflation to cut rates. Low inflation creates predictable financial conditions, which are necessary to carry out investment projects.”
bloomberg.com
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