Russian Minister Says Slowing Inflation Allows Further Rate Cuts

Inflation in Russia is easing, creating room for further monetary policy easing, Economy Minister Maxim Reshetnikov told the RBC news outlet in an interview published on Monday.

Annual inflation in Russia slowed to 5.5% as of 12 May, while private and business lending is barely growing. RBC quoted Reshetnikov as saying that there were growing arguments for further monetary policy easing.

Russia’s annual inflation stood at 5.58% in April, down from 5.86% a month earlier, but remained above the central bank’s forecast range of 4.5%–5.5% price growth this year.

The Russian central bank cut its key rate by 50 basis points to 14.5% in April, in line with analysts’ expectations, despite pressure from businesses to do more to support the economy.

A Reuters poll of analysts conducted last month showed that policymakers were expected to lower the rate further to 12% by the end of the year to spur economic growth after a surprise contraction in the first quarter.

(reuters, max)