MOSCOW, Dec 7 (Reuters) - Russia’s central bank will continue to gradually reduce its key lending rate throughout 2018 but does not expect the impact from previous cuts to be visible until next year, the regulator said on Thursday.
“The effect on the economy and prices from lowering the real interest rate will only appear next year,” it said in a monthly report. “This implies a consistent but gradual lowering of the key rate to avoid the risk of an excessive increase in price pressure in the second half of 2018.”
The central bank also said risks of inflation exceeding its target of 4 percent in the medium term had been reduced but were not completely gone.
A monetary easing cycle became possible this year as Russian annual inflation, once stubbornly high, has tumbled to post-Soviet lows. The central bank said in October it would consider lowering rates further in coming months.
Analysts polled by Reuters have forecast it will cut its key rate to 8.0 percent, from the current 8.25 percent, at its next rate-setting meeting on Dec. 15. (Reporting by Elena Fabrichnaya and Jack Stubbs; Editing by Christian Lowe)