Russia's Economic Development Ministry expects more aggressive key rate reduction if OPEC deal extended

Russia expects the Central Bank to pursue a more aggressive policy regarding the reduction of its key rate if the oil production cut agreement between OPEC and non-OPEC nations is extended, Russia’s Economic Development minister Maksim Oreshkin said.

"Of course, this will open up more opportunities, and more pressure will be put on the Central Bank towards the reduction of rates," Oreshkin said when asked whether the regulator will have to cut the key rate more aggressively if the oil output reduction deal is extended and the inflation target is downgraded to 3.8%.

The Russian Ministry of Economic Development does not rule out that the budget deficit in 2017 may fall below 2% of GDP due to growth of oil prices in the event of a positive decision to extend the agreement to reduce oil production:

"The budget deficit may be below 2%. Oil grows, and oil and gas revenues will be higher," TASS cited the minister as saying.