Russian Central Bank Prepares for Monetary Policy Easing Amidst Economic Concerns

Analysts suggest that the Central Bank of Russia is preparing to initiate a cycle of monetary policy easing. Experts predict that the regulator may begin reducing the key rate as early as this summer due to several factors. High interest rates have started to negatively impact the country's economy, posing challenges for businesses in obtaining necessary credits. This situation threatens their financial stability and could lead to bankruptcies. A reduction in rates could alleviate pressure, providing businesses with access to more affordable loans. Banks have already begun to lower deposit rates, even though the key rate remains high. If this trend continues, the refinancing rate could lose its primary regulatory function. Declining inflation in Russia is also expected to stimulate rate cuts. Specialists note that a key rate reduction invariably leads to a rise in the dollar exchange rate and a weakening of the national currency. The regulator is expected to cut rates as early as this summer, potentially at the June meeting. If the Central Bank starts easing monetary policy in the summer, the rate could decrease to approximately 15% per annum by the end of the year. During this period, the dollar exchange rate may exceed 100 rubles or approach it.