Russia Holds Key Rates at 8%

Russia’s central bank kept interest rates and its key refinancing rate unchanged at eight percent on Friday amid concerns about the eurozone’s economic recovery, the bank said.

“The decision is based on an estimate of inflation risks and the risks of slower economic growth from the present uncertain development of the global economic situation, and is neutral taking into account the current monetary policy,” the bank said in a statement.

Analysts polled by Prime news agency said they did not expect any changes in the Bank of Russia’s monetary policy after a board of directors meeting on Friday.

As of June 9, the annual growth in consumer prices was 3.7 percent, a low level compared with target sets for 2012, while the annual core inflation index fell to 5.1 percent in May, the bank said.

“The planned increase in regulated prices and tariffs … will lead to consumer price growth in the second half of year, which will facilitate the return of inflation to the target range for 2012. The uncertainty about the scale of the impact of these factors on inflation expectations as well as high volatility in the global currency market remains a source of mid-term inflation risk,” the bank added.


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