The Bank of Russia Has Left the Refinancing Rate Unchanged

On 28 September Board of Directors of the Bank of Russia announced its decision to leave the refinancing rate unchanged at the level of 7.75% annual as well as other interest rates of the Central Bank of the Russian Federation. Thus, the break in changing the interest rates has continued.


In will be reminded that on 1 June was the last time the Bank of Russia changed interest rate by cutting them by 0.25 points.

In its statement the Bank of Russia notes that economic revival remains unstable despite the growing credit volumes for the real sector of the economy. As a result, in the wake of the uncertain foreign economic situation the RF Central Bank saw proper to continue implementing stimulating monetary policy. At the same time, the statement highlights increased inflation and inflationary expectations by economic agents. Most likely, precisely this tendency became a principal barrier for further interest rates cuts. Thus, the Bank of Russia sees its task to provide incentives for economic activity. 

We think that a break in the interest rates cuts represents a timely decision. Moreover, in case of higher inflation which, most likely, will continue, it is expedient to raise the question of increasing the interest rates, because low level of interest rates provide incentives for credit organizations to accept additional risks despite the fact that Russia’s economic situation is far from favorable. Moreover, soft monetary policy does not contribute to inflation slowdown whose speed up is determined by both nonmonetary and monetary factors.

P.V. Trunin – Candidate of Economic Sciences, Head of the Department For Monetary Policy