Template-Type: ReDIF-Paper 1.0
Author-Name: Bozhechkova Alexandra
Author-Name-First: Alexandra
Author-Name-Last: Bozhechkova
Author-Workplace-Name: Gaidar Institute for Economic Policy
Author-Name: Kiyutsevskaya Anna
Author-Name-First: Anna
Author-Name-Last: Kiyutsevskaya
Author-Workplace-Name: RANEPA
Author-Name: Trunin Pavel
Author-Name-First: Pavel
Author-Name-Last: Trunin
Author-Workplace-Name: Gaidar Institute for Economic Policy
Author-Name: Knobel Alexander
Author-Name-First: Alexander
Author-Name-Last: Knobel
Author-Workplace-Name: Gaidar Institute for Economic Policy
Title: Russia’s Monetary Policy in 2018
Abstract: Russia’s central bank adopted a new monetary policy regime in 2018 by raising the key interest rate for the first time since December 2014. After slashing the key interest rate  on  February 9th and  on  March 23rd                                         by  0.25 percentage  points  to  7.5 and
7.25 percent per annum, respectively, the central bank lifted the rate on September 14th by 0.25 percentage points to 7.5 percent per annum, with another hike on December 14th of 0.25 percentage points to 7.75 percent per annum. The transition to a neutral monetary policy regime2 slowed as far back as in 2017. There were more constraints to interest rate cuts in 2018 that came from new April and August  anti-Russia  sanctions  that  spurred  capital  outflows  from  the  country  and depreciation of the Russian ruble, a VAT hike decision scheduled for 2019, a late-year fall in energy prices, and concerns about possible heightening of inflation expectations. The key interest rate hike suggested that the Bank of Russia is committed to bring inflation back down to target in the medium term. For instance, according to a forecast of the central bank, end-of-year inflation for 2019 may reach 5–5.5 percent, and it is not until 2020 that inflation is back to its target.
Classification-JEL: E31, E43, E44, E51, E52, E58
Keywords: Russian economy, monetary policy, money market, exchange rate, inflation, balance of payments
Creation-Date: 2019
Revision-Date: 2019
Length: 19 pages
File-URL: https://www.iep.ru/files/RePEc/gai/ppaper/ppaper-2019-960.pdf
File-Format: application/pdf
File-Function: Revised Version, 2019
Handle: RePEc:gai:ppaper:ppaper-2019-960