the Board of Directors of the Bank of Russia at the meeting on Friday, June 19, lowered the key rate from 5.5% to 4.5%, according to a statement the regulator. Such a low level is reached for the first time since then, as the key rate introduced by the Bank of Russia 13 September 2013 as the main indicator of monetary policy.
After a surge in prices in March-April, inflation is back to normal, and even expected quicker slower price growth than projected. At the end of the year inflation may be below 4%, said the Central Bank.
This allows to lower the rate more strongly. At the previous meeting of the Board of Directors of the Bank of Russia on 24 April the key rate was reduced from 6% to 5.5%. At the previous meeting on 20 March, the Central Bank kept its key rate at 6%. Prior to the announcement in the world of the pandemic, the Bank of Russia on 7 February 2020, has reduced the key rate by 0.25% to 6% per annum.
Rates on deposits and loans reduced or are growing after the decision of CBR to lower or raise the key rate. Recently, the Central Bank has committed to lower rates and thus lower rates on deposits and loans.
Sberbank predicts the reduction of the key rate of the Central Bank to 4% by the end of September. Investment Bank Goldman Sachs expects a gradual decline in Bank of Russia key rate to 3.5%.