The Bank of Russia held its benchmark one-week repo rate at 7.75 percent on February 8th, after an unexpected 25bps hike in the previous meeting aimed at limiting inflation risks following the VAT increase last month. Policymakers expect annual inflation to range between 5.0 and 5.5 percent by the end of 2019 and return to 4 percent in the first half of 2020. Interest Rate in Russia averaged 7.31 percent from 2003 until 2019, reaching an all time high of 17 percent in December of 2014 and a record low of 5 percent in June of 2010.

Interest Rate in Russia is expected to be 7.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Russia to stand at 7.00 in 12 months time. In the long-term, the Russia Interest Rate is projected to trend around 6.50 percent in 2020, according to our econometric models.

Russia Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2018-09-14 10:30 AM Interest Rate Decision 7.5% 7.25% 7.25% 7.25%
2018-10-26 10:30 AM Interest Rate Decision 7.5% 7.5% 7.5% 7.5%
2018-12-14 10:30 AM Interest Rate Decision 7.75% 7.5% 7.5% 7.5%
2019-02-08 10:30 AM Interest Rate Decision 7.75% 7.75% 7.75% 7.75%
2019-03-22 10:30 AM Interest Rate Decision 7.75% 7.75% 7.75%
2019-03-22 12:00 PM Monetary Policy Report
2019-04-26 10:30 AM Interest Rate Decision 7.75%



Russia Holds Key Interest Rate at 7.75%

The Bank of Russia held its benchmark one-week repo rate at 7.75 percent on February 8th, after an unexpected 25bps hike in the previous meeting aimed at limiting inflation risks following the VAT increase last month. Policymakers expect annual inflation to range between 5.0 and 5.5 percent by the end of 2019 and return to 4 percent in the first half of 2020.

Excerpts from the Information Notice of Bank of Russia:

Inflation dynamics. In January 2019, annual inflation held at the lower bound of the Bank of Russia expectations. Annual consumer price growth rose to 5.0% in January (vs 4.3% in December 2018). The contribution of the VAT increase to annual consumer price growth in January was moderate. The effect of the VAT increase on inflation can be fully captured no sooner than this April. Faster growth of food prices to 5.5% (vs 4.7% in December 2018) played a significant role in the inflation rise in January. The acceleration of food inflation is substantively attributable to the recovery after its considerable drop in the second half of 2017 and the first half of 2018. Furthermore, prices are completing their adjustment to the ruble’s weakening of the second half of 2018. Annual inflation of prices of non-food goods and services was below that of food prices during the last 12 months.

In January, price expectations of businesses increased on the back of the earlier weakening of the ruble and the VAT increase. Household inflation expectations rose only slightly.

According to the Bank of Russia forecast, the VAT increase and the 2018 weakening of the ruble will temporarily accelerate annual inflation, which will peak in the first half of 2019 and run at 5.0-5.5% by the end of 2019. Quarterly year-on-year consumer price growth is set to decelerate to 4% as early as the second half of 2019. Annual inflation will return to 4% in the first half of 2020 when the effects of the ruble’s weakening and the VAT rise peter out.

Economic activity. Rosstat’s flash estimate shows that 2018 GDP growth totalled 2.3%, which exceeds the Bank of Russia’s forecast of 1.5-2%. However, recent months have seen slower growth in economic activity. December recorded a decline of growth rates in industrial production, construction volumes, real wages and retail sales. The Bank of Russia maintains its 2019 GDP growth forecast in the range of 1.2-1.7%. The VAT increase might have a slight constraining effect on business activity, mostly early in the year. The newly received budgetary funds will be used to raise government spending including investment as early as 2019. Subsequent years might see higher economic growth rates as the planned structural measures are implemented.

Inflation risks. The balance of risks remains skewed towards pro-inflationary risks, especially over a short-term horizon, driven by the VAT increase and price movements in individual food products. Uncertainty remains over future external conditions and their impact on financial asset prices. Despite the oil price growth in January 2019, the risks of supply exceeding demand in the 2019 oil market remain high.

The revisions of the expected paths of monetary policy tightening by the US Federal Reserve and other central banks in developed markets reduce the risks of persistent capital outflows from emerging markets. At the same time, geopolitical factors might lead to strengthened volatility in commodity and financial markets, affecting exchange rate and inflation expectations.

The Bank of Russia leaves mostly unchanged its assessment of risks associated with wage movements, possible changes in consumer behaviour and budget expenditures. These risks remain moderate.

In its key rate decision-making, the Bank of Russia will determine if the increases of the key rate in September and December 2018 were sufficient to bring annual inflation back to the target in 2020, taking into account inflation and economic performance against the forecast, as well as the risks associated with external conditions and financial markets’ response to them.


Central Bank of the Russian Federation | Joana Ferreira | joana.ferreira@tradingeconomics.com
2/8/2019 10:39:29 AM



Russia Money Last Previous Highest Lowest Unit
Interest Rate 7.75 7.75 17.00 5.00 percent [+]
Interbank Rate 8.72 8.28 45.30 4.20 percent [+]
Money Supply M0 8989.90 9339.00 9339.00 0.10 RUB Billion [+]
Money Supply M1 20748.28 21624.13 21624.13 106.31 RUB Billion [+]
Money Supply M2 45721.80 47108.10 47108.10 1090.10 RUB Billion [+]
Foreign Exchange Reserves 482610.00 475945.00 596566.00 4532.00 USD Million [+]
Central Bank Balance Sheet 2551.70 2535.90 3300.70 8.90 RUB Billion [+]
Loans to Private Sector 27491225.00 27199743.00 27491225.00 4601204.00 RUB Million [+]
Deposit Interest Rate 6.10 5.64 101.96 5.00 percent [+]
Cash Reserve Ratio 8.00 8.00 10.00 0.50 percent [+]


Russia Interest Rate

In Russia, interest rate decisions are taken by the Central Bank of the Russian Federation. From September 16th of 2013, the official interest rate is the one-week auction repo rate. Until September 15th of 2013, the official interest rate was the refinancing rate, which was seen as a ceiling for borrowing money and a benchmark for calculating tax payments. This page provides the latest reported value for - Russia Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. Russia Interest Rate - actual data, historical chart and calendar of releases - was last updated on March of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
7.75 7.75 17.00 5.00 2003 - 2019 percent Daily




Country Last Previous
Argentina 63.87 Mar/19
Turkey 24.00 Mar/19
Mexico 8.25 Feb/19
Russia 7.75 Feb/19
South Africa 6.75 Feb/19
Brazil 6.50 Mar/19
India 6.25 Feb/19
Indonesia 6.00 Mar/19
China 4.35 Feb/19
Saudi Arabia 3.00 Feb/19
United States 2.50 Mar/19
Canada 1.75 Mar/19
South Korea 1.75 Feb/19
Singapore 1.66 Feb/19
Australia 1.50 Mar/19
United Kingdom 0.75 Mar/19
Euro Area 0.00 Mar/19
France 0.00 Mar/19
Germany 0.00 Mar/19
Italy 0.00 Mar/19
Netherlands 0.00 Mar/19
Spain 0.00 Mar/19
Japan -0.10 Mar/19
Switzerland -0.75 Mar/19


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