January 18, 2018 / 1:57 PM / a year ago

UPDATE 1-Russia to cut rates slower if new U.S. sanctions imposed

(Adds quotes, details)

MOSCOW, Jan 18 (Reuters) - The Russian central bank will have to scale back its rate-cutting programme if the United States imposes new sanctions on Russian debt, its monetary policy chief Igor Dmitriev said on Thursday.

Washington is due to publish a new report on sanctions against Russia by early February which may include restrictions on holding Russian state bonds, known as OFZ bonds.

When asked if the new round of sanctions would affect monetary policy, Dmitriev said the parameters of the possible sanctions were still unclear.

“With all else being equal, sanctions envisage slower policy easing,” Dmitriev said, referring to the central bank’s rate-cutting plans.

“We live in the real world and indeed we don’t ignore such things.”

The central bank has previously said it has all tools necessary to address any possible impact from new U.S. sanctions. Dmitriev said in late November the central bank’s base scenario did not envisage restrictions on foreign investors’ ability to buy Russian state debt.

The central bank will consider several options at its next rate-setting meeting on Feb. 9, including holding the main interest rate unchanged or cutting it by either 25 or 50 basis points, Dmitriev said on Thursday.

The central bank last cut the key rate, by 50 basis points to 7.75 percent, in December and said further cuts were possible in the first half of 2018. (Reporting by Elena Fabrichnaya; Writing by Andrey Ostroukh; Editing by Jack Stubbs and Catherine Evans)

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