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INTERVIEW-Russian rate cuts to come in 25-50 bps steps, monetary policy chief says
June 8, 2017 / 12:04 PM / 6 months ago

INTERVIEW-Russian rate cuts to come in 25-50 bps steps, monetary policy chief says

MOSCOW, June 8 (Reuters) - The Russian central bank will stick to 25 or 50 basis point steps when trimming its key interest rate amid a fragile disinflationary trend, the head of the monetary policy department said in an interview with Reuters.

Igor Dmitriev said he would rule out a rate increase from 9.25 percent in current conditions and considers it unlikely that the central bank would leave rates on hold at the next board meeting, on June 16.

Dmitriev, who spoke ahead of the central bank’s so-called “week of silence” before the rate decision, said a bigger rate cut of one percentage point also looked unlikely.

“Market expectations about the key rate generally match or view,” Dmitriev said.

The bank’s monetary policy, which envisages further rate cuts until the key rate reaches 6.5 to 6.75 percent, will favour the intention to save among households, he said.

Dmitriev said the Russia central bank expects the U.S. Federal reserve to raise rates twice by the end of the year.

The central bank also expects the global OPEC and non-OPEC decision to extend its output cuts to prop up oil prices this year. In 2018 or in 2019, however, oil prices are still expected to slide to $40 per barrel, Dmitriev said. (Writing by Andrey Ostroukh, editing by Larry King)

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