Bank of Russia Cuts Key Rate for Sixth Consecutive Time
On February 7, 2020, the Board of Directors of the Bank of Russia decided to reduce the key rate by 25 bp to 6% per annum. Slowing inflation is faster than predicted.
The Central Bank records a gradual slowdown in consumer lending, which is mainly due to tightening conditions for the issuance of such loans. "At the same time, the growth of consumer lending is slowing down to a large extent due to the tightening of non-price conditions under the action of the Bank of Russia macroprudential measures", the report said.
The decision of the Bank of Russia to lower the key rate and lower yields on federal loan bonds create conditions for lowering interest rates on loans and deposits, the press release said. “Monetary conditions continued to soften. The decrease in the yield of Federal loan bonds and deposit and loan rates continued. The decisions taken by the Bank of Russia to lower the key rate and lower rates of creation create conditions for a further decrease in deposit and loan rates, which will support the growth of corporate and mortgage lending”, noted in the message.