Monday, May 30, 2011

Central Bank of Russia Raises Overnight Deposit Rate 25bps to 3.50%

The Central Bank of Russia increased its fixed overnight deposit rate by 25 basis points to 3.50% from 3.25%.  The Bank held the benchmark refinancing rate unchanged at 8.25% and the overnight auction-based repurchase rate at 5.50%, while also leaving reserve requirements unchanged.  The Bank said: "This decision was taken keeping in mind the high level of inflationary expectations and risks for sustainable economic growth,". 

Russia reported annual inflation of 9.6% in April, an 18 month high, versus 9.5% in March.  Bank Chairman Sergey Ignatiev is trying to keep inflation between 6% and 7%, meanwhile the Bank said inflation is running at 9.7% as of May 23.  Russian economic growth slowed to 4.1% in the first quarter of 2011, down from 4.5% in the December quarter of 2010; the IMF is expecting 4.5% growth for the full year.

www.CentralBankNews.info

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