Latest news with #NatalyaOrlova
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
31-03-2025
- Business
- Reuters
Russian rouble seen weakening back to around 100 to the US dollar in a year
MOSCOW, March 31 (Reuters) - The Russian rouble is seen weakening back to the level of around 100 to the U.S. dollar in one year from now, following a rally at the start of this year, a Reuters poll of 18 economists showed on Monday. The rouble has strengthened by about 25% in 2025 against the dollar this year, mostly on expectations of easing geopolitical tensions between Russia and the U.S., which started talks in February about a potential peaceful settlement in Ukraine. A strong rouble can widen Russia's budget deficit in 2025, forcing the government to borrow more than it planned. The rouble is currently about 12% stronger than the level assumed in the budget. Analysts saw the rouble weakening to a median of 97 to the dollar by the end of September from the current level of about 85. The rouble was set to weaken further to 100 one year from now, although in the short term it will remain strong. "We believe that in April the rouble exchange rate will remain strong and trade close to current levels, although much will depend on the development of the geopolitical situation," said Kirill Sokolov from Sovkombank. Natalya Orlova from Alpha Bank argued that the geopolitical factor was hard to predict, and that even if relations between Russia and the U.S. improve, easing sanctions and increasing Russian export volumes to global markets will take time. "In our opinion, the main phase of the rouble's strengthening has ended, but there are not yet enough reasons for its significant weakening," Orlova said. In the previous poll analysts saw the rouble at 105 to the dollar in one year. Analysts said the central bank will keep its key interest rate on hold at 21%, the highest level since the early 2000s, at its next rate-setting meeting on April 25. They saw the regulator cutting the rate to a median of 20% in the second quarter. "We believe that the cycle of monetary policy easing may begin at the meetings in June-July," said Sokolov from Sovkombank. Some analysts expected the regulator to start cutting rates in the second half of the year. "It is important to understand that the full set of data needed for the regulator to move towards lowering the key rate will not be available before the July meeting," Gazprombank's analysts said. The analysts cut their full-year inflation forecast to 6.8% from 7.0% in the previous forecast. The full year economic growth forecast remained unchanged from the previous poll at 1.7%.
