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UPDATE 1-Russia's finance minister: central bank should have cut rates quicker
October 6, 2017 / 2:22 PM / 17 days ago

UPDATE 1-Russia's finance minister: central bank should have cut rates quicker

(Changes headline, adds detail)

MOSCOW, Oct 6 (Reuters) - Russian Finance Minister Anton Siluanov said on Friday the central bank should have cut interest rates quicker this year as inflation has been slowing more than expected.

The slowdown in annual inflation this year has exceeded expectations due to a drop in food prices following a solid harvest and to the central bank’s previously tight monetary policy.

Siluanov said full-year inflation is now expected at 3 percent, below an initially anticipated increase in consumer prices of 3.6 to 4.0 percent.

“This year we will see inflation at a historical low,” Siluanov said.

“Maybe at this point the central bank should have been more active in easing monetary policy. Then, maybe, there would be no such rapid decline in the pace of inflation.”

The central bank, which is independent of the government, cut its key rate to 8.5 percent last month after the inflation rate, previously stuck in double digits, slipped below the bank’s target of 4 percent.

“Market rates to a large extent depend on this, an ability to take a loan depends on this,” Siluanov said, referring to the central bank’s main interest rate.

“We have created conditions, the budget has created conditions, for the central bank so it can lower key rates,” he said.

The central bank had previously said it would not trim rates quickly as it would like to anchor inflation expectations and create no extra upside risks for consumer price growth.

Reporting by Darya Korsunskaya; Writing by Andrey Ostroukh; Editing by Hugh Lawson

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