Overview
- The Bank of Russia, which voted Friday, lowered the key rate by 0.5 percentage point to 14.5%.
- Governor Elvira Nabiullina said policymakers weighed holding steady or a small cut as core inflation has hovered at 4% to 5% since mid last year.
- She said a looser stance would require inflation below target and a clear rise in unemployment, conditions that are not in place.
- Nabiullina warned that plans for higher budget spending could lift price pressures and force tighter policy, leaving less room for private lending.
- She said high oil prices allow refilling the National Wealth Fund and restarting state foreign currency buys under the budget rule, which ties purchases to oil prices and can shift money flows during the year even if annual totals stay neutral.