The Central Bank continues to believe that the probability of a rate hike this year exceeds the probability of its reduction. This was stated by Elvira Nabiullina following a meeting of the Board of Directors of the Bank of Russia, the regulator said in a statement.
The range of the average key rate for this year is 7-9% per annum, the Central Bank expects to return to the neutral range in 2025.
The Central Bank will update the calculation of the neutral rate in July. It will be significantly influenced by three factors: budget policy, the risk premium for our economy, the level of foreign risk-free interest rates. Probably, these factors will lead to an increase in our estimate of the neutral rate, the head of the Central Bank noted.
Recall that on March 17, 2023, the Board of Directors of the Bank of Russia kept the key rate at 7.5% per annum.
