The expert did not rule out the reduction of the key rate before the end of the year to 3.5-4%
The key rate in Russia may drop to the end of the year to 3.5-4% if the situation on global markets stabiliziruemost and will not be the second wave of the pandemic, said in an interview with RIA Novosti President of the Russian division of the international Association of professionals foreign exchange and money markets ACI Russia Sergey Romanchuk.
"If the whole world will not be shocked by the second wave of the pandemic, primarily involving the US, China, oil prices again will fall to zero and investors will not withdraw from all markets, that is, if the situation stabiliziruemost and there will be a vaccine - it is possible to see the rate of the CBR at 3.5-4% at the end of the year. This level looks likely-case scenario from the point of view of financial stability," he said.
The Bank of Russia following the meeting of the Board of Directors on June 19 lowered its key rate by 1 percentage point for the first time in five years - to 4.5% per annum, renewing its historical minimum.
The head of the Central Bank Elvira Nabiullina said that the regulator remains additional space for monetary policy easing if the situation in economy will develop in accordance with its basic Outlook. At the same time, she pointed out that the regulator does not expect a transition to negative real interest rates in the next 12 months.
"With regard to further rate cuts, there is still space, though not very large given the target for inflation at around 4%. Now we are seeing inflation around 3%, and the rate in Russia is below the inflation rate is unlikely to be only if we see deflation. Although theoretically such a phenomenon to happen, but so far in Russia nobody believes in that," said Romanchuk.
From his point of view, the interest in OFZ is saved they can still grow in value in a short period of time while lowering your current bet level. "For emerging markets and the ruble differential rates in national currency and in the dollar has value from the point of view of the profitability of carry trade. The presence of this differential between the rates, of course, warms to foreign investors for entry into the most reliable ruble assets – OFZ market", - he added.