The Bank of Russia has lowered its key interest rate to 11%. Investors expect the weakening of the ruble and buy the currency – CIA

August 1, 2015

  As expected, the Bank of Russia decided to lower the key interest rate – up to 11%. Immediately after the announcement the dollar and euro rates jumped up, as investors expect the weakening of the ruble and buy up the currency.

 Following the meeting, the Board of Directors on June 15 the Bank of Russia announced reduction from August 3 key rate by 0.5 percentage points, to 11%. The key rate – is the rate of Bank of Russia loans on securities (repo) for a period of seven days. “The Board of Directors decided to reduce the key rate c 11,50% to 11,00% per annum, given that the balance of risks is still biased towards a significant cooling of the economy, despite some increase in inflationary risks,” – said in a statement the Central Bank.

 According to the forecast of the Bank of Russia, slower growth in consumer prices will continue in a weak domestic demand. “In the future, the Bank of Russia will decide on the level of the key rate, depending on the change in the balance of inflationary risks and risks of the cooling of the economy”, – concludes with the Central Bank. The next meeting of the Board of Directors of the Central Bank, which will consider the level of the key rate, scheduled for September 11.

 Experts predict a decrease of the key rate before, but some of them initially believed that the rate will lower than 0.5 and 1 percentage point. Analysts attributed Sberbank CIB: this is due to the fact that this week the ruble plummeted. “Probably, the Central Bank chose to be cautious and not to provoke a further decline of the ruble,” – they point out.

 The data suggest the Moscow stock exchange: the dollar and the euro gained 30 kopecks. immediately after the decision of the Central Bank to lower its key rate. “The currency has made a small jump: the dollar at 13:30 jumped to 60.60 rubles ./$ euro – up to 66.60 rubles. Then the situation stabilized, and then again a wave of up to 13:40 currency traded at 66.40 rubles. / € and 60.50 rubles ./$ . The market is volatile, while many expect the weakening of the ruble and buy up the currency “, – says head of the analytical department of the IR” Region “Valery Weisberg.

 Maria Yakovleva