Monetary policy will retain the necessary disinflationary impact to bring inflation back to its target in 2024, the Bank of Russia said in a statement following a meeting of the Board of Directors.
"The Bank of Russia’s decisions in April-June to reduce the key rate will boost the availability of credit resources in the economy and limit the scale of economic decline. At the same time, the monetary policy stance will retain its necessary disinflationary impact to bring inflation back to target in 2024," the regulator said.
The Bank of Russia also notes that monetary conditions generally remained tight, softening unevenly in various segments of the financial market. OFZ yields (yields on federal loan bonds) and interest rates in the credit and deposit market have turned downwards.
"With deposit rates dropping, the inflow of funds into term ruble deposits has slowed. At the same time, price and non-price bank lending conditions have remained rigid on the back of a higher risk premium factored into lending rates and tighter borrower requirements of banks. This leaves retail and corporate lending operations weak," the regulator said.
The Bank of Russia noted that lending was supported by government-subsidized lending programs.
On Friday, the Board of Directors of the Bank of Russia decided to lower the key rate by 1.5 percentage points (pp) to 9.5% per annum.