Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details
Russia seen cutting key rate by 100 bps to 10% on Friday- Reuters poll
© Reuters. FILE PHOTO: National flag flies over the Russian Central Bank headquarters in Moscow, Russia May 27, 2022. REUTERS
(Reuters) - The Russian central bank is expected to cut its key interest rate by 100 basis points to 10% on Friday as it tries to make lending more affordable amid sluggish consumer demand and a pause in inflation, a Reuters poll suggested on Monday.
The bank has been gradually reversing an emergency rate hike to 20% in late February that was triggered by Russia's Feb. 24 move to send tens of thousands of troops into Ukraine and the imposition of Western sanctions in response.
Since then, the central bank slashed its key rate three times, each time by 300 basis points and said after an off-schedule meeting in May it held open the prospect of a rate cut at its upcoming meetings.
Seventeen of 26 analysts and economists polled by Reuters predicted that Russia will cut the key rate by 100 basis points on Friday.
"The central bank will act more actively, trying to stimulate the economy to the extent possible," said analysts at MKB Investments.
Russia's domestic bond market has already priced in the rate cut. Yields on 10-year OFZ treasury bonds fell to 9% on Monday, moving inversely with their prices, from around 9.5% seen after the latest rate cut on May 26.
Inflation, the central bank's main area of responsibility, gives the room for rate cuts, while the economy heads for recession.
Russia's annual inflation slowed to 17.35% in the week to May 27 from 17.51% the week before, the latest data showed. That is still far above the central bank's 4% target, but prices were steady over that week, following a modest decline the week before.
Among those who saw a different outcome than a 100 basis point cut, two economists predicted no rate change, one forecast a cut to 10.50% and one predicted a 75-basis-point cut.
"The central bank has lowered the rate enough and can take a pause," said Natalia Orlova, chief economist at Alfa Bank, one of those predicting no rate change. She said continuous rate cuts could backfire by making companies and households wait for even lower rates instead of taking loans now.
Five of the polled economists forecast rates would return to single digits, with three looking for a cut to 9.5% and two predicting a cut to 9%.
Related Articles
Malaysia's ex-PM Najib fails in bid to admit new evidence in final 1MDB appeal
By Reuters - Aug 16, 2022
By Rozanna Latiff PUTRAJAYA, Malaysia (Reuters) - Malaysia's top court on Tuesday denied a request by former Prime Minister Najib Razak to introduce new evidence in his final...
U.S. grant of $1.66 billion for new buses aims to curb emissions
By Reuters - Aug 16, 2022
By David Shepardson WASHINGTON (Reuters) - The U.S. Transportation Department said on Tuesday it is awarding $1.66 billion in grants to cities and states to buy 1,800 buses in a...
Britain launches trade system for developing countries
By Reuters - Aug 16, 2022
LONDON (Reuters) - Britain has launched a scheme to extend tariff cuts to hundreds of products, such as clothes and food, from developing countries, part of London's post-Brexit...
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.