- Central Bank maintains monetary policy, warns that deflation is no longer in the one-year projection.
- Ruble cuts losses, but remains one of the worst performers.
Russia’s central bank announced on Friday that kept its monetary policy rate unchanged at 4.25%, as expected. The ruble is trading negative for the day, although since the decision it managed to cut losses.
The central bank acknowledged that in December and January, prices continued to grow at a high rate. He stated at the same time that demand is recovering faster and more sustainably than expected. He warned that supply-side restrictions are still present, putting pressure on prices.
“Disinflationary risks no longer prevail over a one-year horizon”Stated the Russian monetary authority in the statement. They estimate that in the future, given the current stance of monetary policy, annual inflation will remain close to 4%.
USD / RUB: The ruble, the worst on Friday
The Russian ruble is one of the worst performing currencies on Friday. Prior to the central bank’s decision it already was, possibly affected by the rise in the dollar and the threat from Russia’s Foreign Minister Sergei Lavrov, who stated that Russia is ready to cut ties with the European Union if the bloc continues with its painful economic sanctions.
USD / RUB is rising 0.80%, snapping an eight-day streak of declines. You are erasing much of the weekly losses. It is trading around 74.25 / 30, having hit a daily high at 74.50.
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