The key rate may fall to 6.5-7% in 2019, said Nabiullina

© RIA Novosti / Grigory to Sysoeva in fotoreceptor of the Central Bank Elvira Nabiullina before a press conference following the meeting of the Board of Directors. 15 September 2017The key rate may fall to 6.5-7% in 2019, said Nabiullina© RIA Novosti / Grigory to Sysoeva the image Bank

The key rate of the Bank of Russia, according to estimates by the regulator, may fall to 6.5-7% in 2019, said the head of the Central Bank Elvira Nabiullina at a press conference on Friday.

Last year, Nabiullina for the first time voiced the Russian regulator at equilibrium key rate: with stable inflation of 4%, the key rate of the Bank of Russia may be higher by 2.5-3 percentage points, that is to be 6.5-7%.

«We reiterate our rating, we keep it at the level of the equilibrium rate in real terms of 2.5-3%, respectively in nominal terms to 6.5-7%. Our rate will remain above the neutral level, while we estimate inflation expectations as too high in relation to our goals and, most importantly, not anchored,» — said Nabiullina.

To the extent that, as inflation expectations will decline and will be less sensitive to temporary factors, the Central Bank will be able to move to neutral rates.

«The experience of other countries shows that it can take different time. In our assessment, it was two or three years. Rather, 2019. But again, it does not promise that our rates this year will be close, will be equal to the neutral rate. These are our estimates of when we will be able to do it,» — said the head of the Central Bank.

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