Russia’s central bank says cuts key rate to 8.25% from 8.5%

MOSCOW, Oct 27 (PRIME) -- The board of directors of Russia’s central bank has cut the key rate to 8.25% annually from 8.50%, but noted that inflationary expectations remain excessive, the regulator said on Friday.

“Annual inflation remains at around 4%. Under the estimates, it amounted to 2.7% as of October 23, 2017. The decline of inflation from the forecast is mainly connected with temporary factors. In September, a reduction of the annual pace of food prices growth was more significant than expected due to a higher supply of agricultural products,” the central bank said.

Inflation will amount to around 3% at the end of 2017 and will further approach 4% as temporary factors are exhausted.

Inflationary expectations remain excessive, and their reduction is unstable.

Russia’s gross domestic product (GDP) growth continued in July–September and was in compliance with the forecast, the regulator said. Agricultural production increased, positive dynamics were seen in the machine building industry and in cargo transportation.

The GDP growth forecast of 1.7–2.2% in 2017 remains unchanged.

The central bank will continue gradually switching from moderately tight to neutral monetary policy.

The central bank sees a possibility for lowering the key rate at its next meetings. The next meeting of the board of directors on the issue is slated for December 15.

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