Central Bank has kept its key rate at 10 percent

UFA, 16 December 2016. /Bashinform News Agency, Olga Murtazina/. The Central Bank has kept its key rate at 10 percent, according to a press release of the regulator. "The Board of Directors notes that the inflation and economic activity rates in general correspond to the forecast, inflation risks have declined slightly. This slowing down in consumer prices growth rate is partly due to the influence of temporary factors, and reduction of inflation expectations remains unstable. In view of the decision and the preservation of a moderately tight monetary policy the inflation will decrease to the target level of four percent at the end of 2017", the Central Bank stated. A potential reduction in the key rate will be considered in the first half of 2017.

The next meeting of the Board of Directors of the Bank of Russia, which will consider the key rate level issue, is scheduled for February 3, 2017.

In December 2014 due to the financial crisis and a sharp ruble drop the Central Bank raised its key interest rate to 17 percent per annum and in 2015 gradually brought it to 11 percent. In September 2016 the rate was reduced from 10.5 to 10 percent, and is retained at this level so far.

The key rate is an index according to which the Bank of Russia grants loans to commercial banks. The key rate has a direct impact on the interest rates on loans to individuals, as well as the level of inflation in the country.