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Reuters
02-06-2025
- Business
- Reuters
Russian central bank seen keeping key rate on hold at 21%
MOSCOW, June 2 (Reuters) - Russia's central bank will keep its key interest rate on hold at 21% at its board meeting on June 6, but may soften its rhetoric and signal rate cuts later in the year, a Reuters poll of 26 economists showed on Monday. Seven economists expected a rate cut this week, but the majority pointed to still rising household inflationary expectations, which are closely monitored by the central bank, as well as geopolitics, as obstacles to an early cut. "The geopolitical factor and the state of the global economy remain the main sources of uncertainty. The decline in oil and commodities poses risks of a weaker rouble and higher inflation," said Sovkombank's chief economist Mikhail Vasilyev. Russia and Ukraine held their second round of peace talks on Monday, but the two sides are still far apart on how to end the war and the fighting stepped up ahead of the negotiations. Natalya Orlova from Alfa Bank cited the rise in inflationary expectations, low unemployment, and increased risks to the budget as the main factors in favour of keeping rates unchanged. "I believe that the transition to a rate cutting cycle is better postponed until the fall, when the picture of food price dynamics in the new season becomes clearer," Orlova said. In the poll, the forecast for inflation this year was unchanged from the previous poll at 7%, while gross domestic product (GDP) growth was seen slightly lower at 1.5% compared to 1.6% in the previous poll. The rouble, which has rallied by over 42% against the dollar this year mostly on expectations of a peaceful settlement in Ukraine, is seen weakening to 97.5 to the U.S. dollar in one year compared to 95 to the dollar in the previous poll. The rouble's rally, which has taken place despite a fall in prices for oil, surprised many analysts, but has also helped the central bank in fighting inflation as imported goods are becoming cheaper.
Mint
27-05-2025
- Business
- Mint
Russian rouble hovers near 80 to the dollar
May 27 - The Russian rouble hovered close to 80 to the dollar on Tuesday, supported by the peak of favourable month-end tax payments, low foreign currency demand and high interest rates, with focus turning to the central bank's rate-setting meeting next week. By 0857 GMT, the rouble was down 0.2% at 79.90 per U.S. dollar, LSEG data based on over-the-counter quotes showed. The Russian currency hit a near two-year high of 79.32 to the dollar last week. The Russian currency has strengthened by over 40% against the dollar this year, a rise analysts have attributed to the easing of geopolitical tensions - mainly with U.S. President Donald Trump's administration - and the central bank's tight monetary policy, which has reduced demand for foreign currency. However, the rouble is susceptible to changes in the geopolitical situation, and any recovery in imports could put pressure on the currency, said Alfa Bank Chief Economist Natalia Orlova. "The current stabilisation of the rouble near the 80 mark to the dollar does not look sustainable," she said. The government last week said it had extended requirements for major exporters to sell a proportion of their foreign currency earnings until the end of April 2026, buttressing the rouble. Those restrictions, the Bank of Russia's 21% key interest rate and the peak of month-end tax payments, which usually see exporters convert their foreign currency earnings into roubles to pay local liabilities, are all supporting the rouble. Economy Minister Maxim Reshetnikov urged the central bank to consider slowing inflation when it sets interest rates next week, warning that the Russian economy is facing "hypothermia" risks. Against the Chinese yuan, the rouble was unchanged at 11.09 on the Moscow Stock Exchange. Russia's central bank uses yuan for foreign exchange interventions, and it is the most-traded foreign currency in Russia. Brent crude oil, a global benchmark for Russia's main export, was up 0.1% at $64.77 a barrel. This article was generated from an automated news agency feed without modifications to text.
Business Recorder
25-04-2025
- Business
- Business Recorder
Russian central bank keeps key rate on hold at 21%
MOSCOW: The Russian central bank maintained its key interest rate at 21% on Friday, with inflation starting to decline but new risks facing the Russian economy because of global economic turbulence triggered by U.S. trade tariffs. 'A further decrease in the growth rate of the global economy and oil prices in case of escalating trade tensions may have proinflationary effects through the rouble exchange rate dynamics,' the central bank said in a statement. The decision was in line with the results of a Reuters poll of 25 analysts. The central bank is keeping the key rate at the highest level since the early 2000s as it struggles to combat inflation. The rouble, which has surged by 37% against the dollar this year, has helped this effort by making imported goods cheaper. 'Current inflationary pressures, including underlying ones, continue to decline, although remaining high,' the regulator said. It maintained its 2025 inflation forecast at 7.0–8.0%, predicting inflation will return to the target of 4.0% in 2026. Russia's economy ministry cuts 2025 Brent price forecast by nearly 17%, Interfax reports The regulator also left some room for further rate hikes saying that it expected the average key rate in the range of 19.5–21.5% in 2025, compared with the previous estimate of 19-22%. Russia's economy has performed better than expected during the three years of the conflict in Ukraine, despite sanctions. However, the country is now preparing for a prolonged period of lower oil prices and declining budget revenues. 'This decision means that the central bank is creating predictable conditions within the economy in order to reduce the uncertainty currently associated with trade wars and instability in oil prices,' said Alfa Bank's Natalya Orlova. The central bank noted that economic activity has been slowing in the first quarter of 2025, compared with the fourth quarter of 2024. It said the share of enterprises experiencing labour shortages is also declining. The central bank maintained the 2025 growth forecast at 1-2%, below the government's forecast of 2.5%. It said that it will hold the next meeting on June 6.
Reuters
11-03-2025
- Business
- Reuters
Rouble hits over six-month high after Ukraine pummels Moscow with drones
March 11 (Reuters) - The Russian rouble strengthened to a more than six-week high against the dollar on Tuesday, buoyed by subdued imports and hopes for a resolution to the war in Ukraine, even after Kyiv launched its biggest drone attack on Moscow. Ukraine's attack, in which at least 91 drones targeted the Russian capital, sparked fires, closed airports and forced dozens of flights to be diverted, Russian officials said. By 1319 GMT, the rouble was up 2.7% at 85.25 to the dollar in over-the-counter market trade, its strongest level since August 7, 2024. Against the Chinese yuan, the most traded foreign currency in Russia, the rouble was up 0.9% to 11.77. The rouble is up against the dollar this year, mostly thanks to expectations of improved relations between Moscow and Washington that could produce some conflict resolution in Ukraine and the possible easing of sanctions against Russia. A trader at a major Russian bank, who spoke on condition of anonymity, said active rouble buying was happening because there is a feeling in the market that agreements may have already been reached. The rouble brushed aside U.S. President Donald Trump's threat last week of imposing banking sanctions on Russia to force it to the negotiating table and was unmoved by Ukraine's drone bombardment on Tuesday. Strong exports, subdued imports and the geopolitical risk premium is keeping the national currency from devaluation, said BCS World of Investments analysts. "The national currency's exchange rate can only devalue if negotiations are disrupted without prospects for their resumption, but this is not the baseline scenario," they said. Alfa Bank strategist John Walsh said Russian investors were waiting for news from crunch talks between Ukrainian and U.S. officials in Saudi Arabia on Tuesday, which could provoke a sharp volatility spike. Brent crude oil , a global benchmark for Russia's main export, was up 0.3% at $69.49 a barrel.
