The International Monetary Fund staff team said that easing Russia's monetary policy now appears appropriate. According to them, now it's time to cut the key rate.
"Monetary policy has been successful in addressing potential shocks to price stability," the IMF staff said at the end of their visit to Russia.
According to the experts, the current monetary policy stance is estimated to be moderately tight. The VAT increase has had a lower-than-expected impact on headline inflation, the IMF staff said, adding that the recent slight appreciation of the ruble and stability of domestic fuel prices reduce inflationary pressures.
"A forecast that incorporates these developments is consistent with inflation reaching the 4% target in early 2020, under a declining path for the central bank’s policy rate," the statement reads.
The IMF staff warns that delay in reducing rates would increase the likelihood of subsequently undershooting the inflation target" in 2020.
On April 26, the board of directors of Russia's Central Bank held its key interest rate at 7.75%, but said it could consider cutting rates as early as June. The next meeting of the Board of Directors will be held on June 14.