The Board of Directors’ Decision on the Bank of Russia Interest Rates (Unofficial translation)
The Bank of Russia External and Public Relations Department informs that on 10 May 2012 the Board of Directors of the Bank of Russia decided to maintain the refinancing rate and the interest rates on the Bank of Russia operations unchanged (table “Interest rates on the Bank of Russia operations” ).
The decision was supported by the assessment of inflation risks and economic growth prospects.
In April inflation remained low in comparison with the target for 2012 — at 3.6% over year ago, while core inflation rate declined to 5.3%. Inflation will rise in the second half of the year as a result of a forthcoming increase in the majority of regulated prices and tariffs as well as a fading disinflationary effect from food prices observed earlier. However, the Bank of Russia expects inflation to be within the target range at the end of 2012. The uncertainty regarding the scale of influence of this factors on inflation expectations remains a significant source of medium-term inflation risks.
Industrial capacity utilization rates in March were close to their pre-crisis levels. Production indicators for the first quarter of the year as a whole were fairly strong, while consumer and producer confidence indicators improved. Taking this into account the Bank of Russia does not consider a decline in industrial production in March as indicating higher risks of economic slowdown.
The labour market conditions together with strong household credit expansion continue to support robust consumption growth. According to the Bank of Russia estimates, gross output is close to its potential level, which implies an absence of significant demand-pull price pressures.
Considering recent domestic and international macroeconomic developments the Bank of Russia judges that the current level of money market interest rates is appropriate for the coming months. The Bank of Russia will continue to monitor inflation risks and in making monetary policy decisions will rely on medium-term economic growth prospects, inflation forecasts and the dynamics of inflation expectations.
The next meeting of the Board of Directors on monetary policy issues is planned to be held in the first half of June 2012.
Interest rates on the Bank of Russia operations (% p.a.)
| Purpose | Type of instrument | Instrument | Term | Rate since 26.12.11 |
| Liquidity provision | Standing facilities (fixed rates) | Overnight loans | 1 day | 8.00 |
| FX swaps (rouble rate) | 1 day | 8.00 | ||
| Lombard loans, REPO | 1 day, 1 week1 | 6.25 | ||
| Lombard loans | 30 days1 | 6.25 | ||
| REPO | 12 months1 | 7.75 | ||
| Loans secured by gold | Up to 90 days | 6.75 | ||
| From 91 to 180 days | 7.25 | |||
| From 181 to 365 days | 7.752 | |||
| Loans secured by non-marketable assets and guarantees | Up to 90 days | 7.00 | ||
| From 91 to 180 days | 7.50 | |||
| From 181 to 365 days | 8.00 | |||
| Open market operations (minimum interest rates) | REPO auctions | 1 day | 5.25 | |
| Lombard and REPO auctions | 1 week | 5.25 | ||
| 3 months | 6.75 | |||
| 6 months1 | 7.25 | |||
| 12 months | 7.75 | |||
| Liquidity absorption | Open market operations (maximum interest rates) | Deposit auctions | 1 week | 4.753 |
| 1 month | 5.50 | |||
| 3 months1 | 6.50 | |||
| Standing facilities (fixed rates) | Deposit operations | 1 day, 1 week1, call | 4.00 | |
| Refinancing rate | 8.00 | |||
| 1 Operations have been suspended. |
| 2 Interest rate has been set since 02.04.2012 |
| 3 Interest rate has been set since 10.04.2012 |
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