Report: Russian cbank may speed up key rate cut on high oil prices

MOSCOW, Sep 23 (PRIME) -- Russia’s central bank may cut its key rate faster if oil prices are higher or the economy is in a better shape than it is expected in the central bank’s baseline development scenario, the regulator’s Chairwoman Elvira Nabiullina said in an interview with CNBC broadcast Friday.

On September 16, the central bank lowered the key rate by 0.5 percentage points to 10% in the light of slowing inflation and lower inflationary expectations amid unstable economic activity. The authority also said that the key rate is unlikely to be reduced again this year.

“We have been saying that a reduction in the rate is very unlikely. But of course if any extraordinary events occur. For example if there is a much higher oil price because of certain other circumstances or drivers which suggest that the overall economic dynamics and inflationary dynamics will be better than those used for our base scenario, which of course can happen,” Nabiullina said.

“However, we do not see a high probability of these sorts of events unfolding,” she added.

The regulator’s baseline scenario envisages the average annual oil price of U.S. $40 per barrel in 2017–2018.

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