Key rate may be reduced as early as March - Aksakov

15:02; 14 February 2025 year

The achieved monetary policy rigidity is sufficient to reverse the pro-inflationary trend that has been unfolding in recent months, so the Bank of Russia has decided to keep the key rate at the current level. Anatoly Aksakov, a State Duma deputy and chairman of the Financial Market Committee, wrote about this in his telegram channel.

-We are seeing the first signs of a slowdown in inflationary processes. If the decline in the dynamics of price growth becomes stable and at the same time the inflation expectations of the population begin to decrease, the Bank of Russia will be able to proceed to a smooth reduction in the key rate.

Overheating in the lending sector, which has become one of the key factors in the tightening of the PREP, began to weaken due to the regulatory measures of the Bank of Russia. At the same time, the risks of continued overheating of the economy in the short term remain due to high budget expenditures at the beginning of the year. However, in general, fiscal policy for the year will be more balanced compared to the previous year, and the budget deficit will decrease to a minimum level, Aksakov writes.

According to the deputy, if current trends continue, the key interest rate may be reduced at the next meeting of the Board of Directors of the Bank of Russia.

- This week was marked by important positive foreign policy signals, and the foreign exchange market has already reacted to this with a noticeable strengthening of the ruble. Obviously, if there is a weakening of geopolitical tensions, positive macroeconomic trends will intensify, and in this case, this year we will see a more dynamic decrease in inflation and the key interest rate," Aksakov concluded.

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