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Russia’s Central Bank cuts key rate to 9%

Логотип TASS TASS 16.06.2017 TASS

MOSCOW, June 16 /TASS/ The Bank of Russia Board of Directors decided to cut the key rate to 9.00% per annum, the regulator said in a press release on Friday.

"The Board notes that inflation is close to the target, inflation expectations keep declining, and economic activity is recovering. Inflation risks were down in the short term, while they remain in place in the medium term. The Bank of Russia will continue to conduct moderately tight monetary policy to maintain inflation close to the 4% target," the regulator said.

"The Bank of Russia sees room for cutting the key rate in the second half of 2017," it said.

"While making its decision hereinafter, the Bank of Russia will assess inflation risks, the inflation dynamics and economic developments against the forecast," the report said.

2017 GDP outlook

Russia’s Central Bank has upgraded its GDP growth outlook for this year to 1.3-1.8% from 1-1.5%, the regulator said.

"Economic activity continues to recover. Household consumption is on the rise alongside with the growth in investment and industrial output. Currently, a moderate growth in consumer expenditures does not exert any inflationary pressure under increased supply of goods and services. Considering the current recovery trends, the Bank of Russia has increased its GDP growth rate forecast to 1.3-1.8% in 2017," the report said.

Economic growth is getting closer to its potential level, the regulator said. "The situation in the labor market with the shortage of personnel in certain segments being evident is a constraint. In the sequel a GDP growth rate higher than 1.5-2% annually will be reached if structural reforms take place," the Central Bank said.


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