On Friday, December 18, the Board of Directors of the Bank of Russia, following the results of the last meeting in 2020, kept the key rate at 4.25% per annum.
As explained in the Central Bank, this decision is associated with the emerging acceleration of inflation.
“Inflation is growing above the forecast of the Bank of Russia and by the end of 2020 is expected to be in the range of 4.6-4.9%.
One-off pro-inflationary factors have a more significant and prolonged upward influence on prices against the backdrop of rising inflationary expectations of the population and business, as well as supply-side constraints, ”the Central Bank said in a press release.
As follows from the materials of Rosstat, in November inflation in Russia for the first time since August 2019 exceeded the target level of the Central Bank (4%) and amounted to 4.4%.
Moreover, by December 14, the value reached 4.7%, the Central Bank said.
According to the regulator, the observed acceleration of inflation is associated with higher prices in food markets, as well as exchange rate fluctuations throughout 2020.
The head of the Central Bank Elvira Nabiullina said this during a press conference.
“According to preliminary estimates, 0.2 percentage points (in the growth of inflation. -
RT
) accounted for the accelerated rise in prices for sugar and sunflower oil, 0.3 percentage points - for the growth in export prices of grain, their transfer to the prices of both bakery products and more a wide range of food products, ”said the head of the Central Bank Elvira Nabiullina at a press conference.
Elvira Nabiullina, Chairman of the Central Bank of the Russian Federation
RIA News
© Press Service of the Bank of Russia
Recall that on December 9, Russian President Vladimir Putin criticized the government for the rise in food prices and demanded that measures be taken to resolve the problem within a week.
According to him, the highest rise in price was for such goods as sugar (by 71%), vegetable oil (by 23.8%), flour (by 13%) and bakery products (by 6%).
In this regard, by December 16, the government has prepared a number of measures to combat the rise in prices for socially important products.
In addition, a bill was developed that allows the government to introduce price regulation under certain conditions.
Looking at prices
The Central Bank's decision to leave the key rate unchanged should limit further growth in consumer prices.
This point of view in a conversation with RT was expressed by Alexey Korenev, an analyst at the Finam Group.
“The regulator was tempted to cut the rate again, because this would further stimulate business activity and consumer demand.
At the same time, inflation has risen above the target, and in the first quarter of 2021 may approach 5%.
Therefore, the Central Bank still preferred to pause and thus leave room for further maneuver, ”Korenev explained.
According to the forecast of the Bank of Russia, taking into account the policy pursued by the regulator by the end of 2021, inflation in Russia may return to the range of 3.5-4%.
In subsequent years, the value will continue to remain close to the target level, according to the Central Bank.
Recall that the last change in the key rate took place on July 24.
Then the Central Bank lowered the indicator from 4.5 to 4.25% per annum and explained its decision by the low inflation rate in the country.
However, already at the end of summer, the growth of consumer prices in Russia began to gradually accelerate.
As a result, at meetings in September and October, the Central Bank's management decided to keep the rate and thereby contain inflation risks.
The next meeting of the Board of Directors of the Bank of Russia is scheduled for February 12.
According to experts, at the upcoming meeting of top management, the Central Bank may again leave the key rate unchanged.
“If inflation continues to accelerate, the regulator is likely to postpone the rate cut in February.
However, in the future, during the first half of 2021, the Central Bank may well reduce the rate to 4% per annum, "Ksenia Lapshina, an analyst at QBF IC, told RT.
The Central Bank itself also notes the possibility of a rate cut in the foreseeable future.
However, as Elvira Nabiullina stated, the likelihood of such a decision has slightly decreased in recent years.
“As for the likelihood of further rate cuts, we continue to talk about space, although not as positively as before, I guess.
We really need to assess whether there is such a potential, ”the head of the Central Bank stressed.
No sudden movements
According to Vasily Karpunin, head of the information and analytical content department of BCS World of Investments, the preservation of the key rate at the December meeting was expected.
As the expert noted, investors in their actions took into account this scenario in advance, so the decision of the Central Bank did not affect the dynamics of the ruble.
On Friday, the Russian currency is depreciating moderately on the Moscow Exchange.
In the afternoon, the dollar and euro rates grew by 0.9% - up to 73.5 and 90.2 rubles.
“We have seen that the ruble has strengthened a lot lately.
So, since November, the dollar rate dropped from 79 to 72-73 rubles.
Now we are witnessing a technical correction of the course, ”said Alexey Korenev.
According to him, from 20 to 28 December, the tax period may provide support for the Russian currency.
At this time, exporting companies traditionally sell foreign currency and buy rubles to pay taxes.
In addition, the observed recovery in oil prices may play in favor of the ruble.
Since the beginning of December, Brent crude on the ICE exchange in London has risen in price by more than 8% - up to $ 51-52 per barrel.
At the same time, the growth of quotations may continue in 2021, experts do not exclude.
“According to our estimates, until the new year the dollar exchange rate will fluctuate in the range of 73-75 rubles, and the euro rate - around 89-91 rubles. In the first half of 2021, indicators may remain at the same levels. Towards the end of next year, the dollar may drop to 70-73 rubles with oil prices at $ 50-55 per barrel, "concluded Vasily Karpunin.