FXStreet (Edinburgh) – The Russian central bank (CBR) has decided to leave its benchmark rate intact at 11.0% at today’s meeting. The CBR justified its decision in the increasing risks of higher inflation and the likeliness of the economic activity slowing its pace.
The CBR acknowledged that a weaker RUB could exert further upside pressure on prices in the medium term, but it remains confident that the current monetary conditions coupled with the slack in domestic demand could eventually drive inflation figures lower in the longer run.
The central bank also argued that the domestic economic will hinge on the performance of energy prices and its ability to adjust to shocks overseas. The central bank now sees the barrel of crude at $50 for the next three years, this echoing in lower GDP projections, while it expects inflation to gyrate around 7% in September 2016 and 4% in 2017.
(Market News Provided by FXstreet)