Economist Vasily Koltashov believes that the reduction of the key rate will be gradual.
On Friday, October 25, there will be a meeting of the Board of Directors of the Bank of Russia, where the key rate may be raised to 20-22%. In September it was already 19% to reduce inflation.
Vasily Koltashov noted in a conversation with the Public News Service that the rate is expected to rise to 20% at the next meeting, but it will not lead to a noticeable slowdown in inflation. According to him, the high rate does not stop inflation, but only slightly slows it down.
The Central Bank may raise the rate even more, but so far the limit is 22%.
According to Vasily Koltashov, the easing of monetary policy should not be expected until the military operation is over and the goals are achieved.
“Tight monetary policy will continue until the end of the operation, unless a new crisis emerges. Even after that, the transition to easing will be smooth, as the international conflict and fighting situation will remain. Russia will need time to reduce the costs of supplying export products. The high Central Bank rate will remain for at least one and a half to two years. But circumstances may arise that will allow us to do without it,” the specialist said.
The main issue is the stability of the ruble. If the national currency weakens, it may lead to an increase in inflation and a new increase in the rate to curb it, concluded the economist.