And undoubtedly, it would be wrong to expect a straightforward…
And undoubtedly, it would be wrong to expect a straightforward reaction from the Central Bank; specifically, that rising fuel prices, which could lead to price increases in other sectors, (will result in - IF) the decision to combat them by raising the key interest rate.
Consensus
- The Bank of Russia is scheduled to hold a meeting on July 24 regarding its key interest rate.
- There is significant uncertainty about whether the central bank will maintain or change the current key rate of 14.25%.
- Fuel price increases are identified as a major factor contributing to inflation in June.
- The Bank of Russia has stated it cannot ignore fuel prices and inflation expectations when making its decision.
- Government measures are expected to help normalize the fuel market situation.
Points of divergence
- Analysts from major banks and investment firms believe this could be the first pause in the current monetary policy easing cycle, which began in June of last year. — vm
- The portfolio manager at Alpha Capital believes that a pause is most likely because inflation may not lead to broader price increases if fuel prices stabilize. — riamo
- The Deputy Chairman of the Central Bank, Alexei Zabotkin, stated that the June rise in consumer prices was driven by one-time factors and that a temporary spike is expected to be followed by slower growth. — fontanka
- Zabotkin emphasized that fuel price impacts extend beyond direct costs due to availability restrictions, not just pricing. — kommersant
- Alexander Shokhin of the Russian Union of Industrialists and Entrepreneurs believes a 'frontal' reaction from the central bank—such as raising rates in response to fuel prices—is inappropriate and hopes for prudence. — interfax
Coverage (7 sources)
- RBC: Central Bank of Russia may keep key rate at 14.25 percent annual — Вечерняя Москва
- Expert names most likely outcome for Central Bank's July 24 key rate decision — РИАМО
- Deputy Governor of the Central Bank: The Bank of Russia cannot 'close its eyes' to fuel prices — Фонтанка
- Central Bank promises not to ignore fuel prices — Коммерсантъ
- Business calls on Central Bank not to raise key rate due to fuel price increase — Фонтанка
- Shokin confident that the Central Bank's reaction to fuel price hikes should not be 'head-on' — Интерфакс
- Russian Standard Bank assesses likelihood of new key rate increase — РИАМО
Key entities
- Bank of Russia
- CB
- Russia
- Central Bank
- Alexander Shokhin
- RBC
- Alexey Zabolotkin
- RIAMO
- Russian Standard
- Moscow
- INTERFAX.RU
- U
- Central Bank
- RSPC
- Maxim Timoshenko
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