OREANDA-NEWS. Against the backdrop of a pandemic and existing quarantine measures, the Central Bank of Russia may reduce the key rate from current 5.5 % to 3.5 % by the end of the year if inflation falls below the target value of 4 %. This was predicted by specialists of the Bank of America.

At the end of April the Russian regulator lowered the key rate by 0.5 percentage points, to the lowest level since 2014. In the latest report on monetary policy, the Bank of Russia predicted price increases of 3.8–4.8 % during the current year. According to it, the disinflationary effect of weak demand in the economy compensates for the effect of such inflationary factors as weakening rouble and increased demand for some goods in anticipation of self-isolation in March.

At a press conference in early May, Central Bank Chairman Elvira Nabiullina allowed a more aggressive softening of the policy, specifying that the option of reducing by 100 percentage points will be considered at the meeting of the Board of Directors in June.