the Bank of Russia does not exclude the possibility of “significantly increase the key rate” if it receives “convincing data from the implementation of the alternative scenario in the economy,” the Bank of Russia said.
“At the time of the June decision at the key rate, there were no decisive arguments to reject the basic scenario in favor of the alternative and increase the key rate. However, if convincing evidence of the implementation of the alternative scenario in statistical data is obtained, At the July meeting, a decision may be made to increase the key rate, and significant, ”the regulator said.
The regulator noted that the Russian economy in the first quarter of 2024 increased by 5.4%, which is higher than the forecast of the Bank of Russia. “According to operational data, in April the economic growth slowed down a bit, but remained high. The consumption of households in the first quarter of 2024, according to estimates, increased stronger than the Bank of Russia. According to operational data, consumer activity in the II quarter remains high, although there are some Signs of its slowdown.
Alternative scenario involves a further increase in tension in the labor market, continuing or accelerating the growth of consumer, investment and credit activity.
“The growth of lending and consumption is not slowed down, inflation can gain a foothold at the current increased level or even go to growth,” the regulator noted.
“According to the results of the discussion, the Board of Directors of the Bank of Russia on June 7, 2024 retained the key rate at 16 % per annum from June 10, 2024. The board of directors tightened the signal, indicating the possibility of raising the key rate at the next meeting and the need to maintain hard cash Credit conditions in the economy are significantly longer than assumed in April. -roditic conditions will ensure the return of inflation to the target in 2025 and its maintenance near 4% in the future, ”summarized the regulator.