Press Service

The Central Bank of the Russian Federation (Bank of Russia)

Press Service

12 Neglinnaya Street, Moscow, 107016 Russia;
www.cbr.ru

Information Notice

The Bank of Russia External and Public Relations Department informs that on 15 June 2012 the Board of Directors of the Bank of Russia decided to maintain the refinancing rate and the interest rates on the main Bank of Russia operations and to change starting from 18 June 2012 the parameters of the calculation of the swap points for the overnight FX swap transactions: to reduce to 6,50% p.a. the interest rate on the rouble swap leg and to reduce to 0% p.a. the interest rate on the foreign currency swap leg ( table “Interest rates on the Bank of Russia operations” ).

The decision was supported by the assessment of inflation risks and economic outlook, taking into account the increased global economic uncertainty and it is neutral in terms of monetary policy stance. The cut in the rouble rate on the FX swap transactions will enhance the ability of the credit institutions to obtain rouble liquidity from the Bank of Russia which should contribute to restraining money market interest rates volatility and strengthening of the interest rate channel of the monetary policy transmission mechanism.

Inflation remained low in comparison with the target for 2012, amounting to 3.7% over year ago as of 9 of June. Core inflation rate declined to 5.3% in May. The planned increase in the majority of regulated prices and tariffs in July as well as a fading disinflationary effect from food prices will result in the consumer prices growth in the second half of the year, thus contributing to the return of the inflation back to the target range for 2012. The uncertainty regarding the scale of influence of these factors on inflation expectations as well as the elevated volatility of the global FX market remain a source of medium-term inflation risks.

The decline in the industrial production growth rate in year-over-year terms in April was primarily attributed to the decline in particular components of the index due to weather-related factors and does not indicate higher risks of economic slowdown. Some moderation in retail sales growth has been observed in the recent months, still the labour market conditions together with household credit expansion continue to support robust domestic demand. 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 the influence of the global economic developments, including the possible change in the global commodity market conditions, on the Russian economy. In making monetary policy decisions the Bank of Russia will rely on medium-term inflation goals and the economic outlook, as well as 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 July 2012.

Interest rates on the Bank of Russia operations (% p.a.)

Purpose Type of instrument Instrument Term
Rate since 26.12.11
Rate since 18.06.12
Liquidity provision Standing facilities (fixed rates) Overnight loans 1 day
8.00
8.00
FX swaps (rouble rate) 1 day
8.00
6.50
Lombard loans, REPO 1 day, 1 week1
6.25
6.25
Lombard loans 30 days1
6.25
6.25
REPO 12 months1
7.75
7.75
Loans secured by gold Up to 90 days
6.75
6.75
From 91 to 180 days
7.25
7.25
From 181 to 365 days
7.752
7.75
Loans secured by non-marketable assets and guarantees Up to 90 days
7.00
7.00
From 91 to 180 days
7.50
7.50
From 181 to 365 days
8.00
8.00
Open market operations (minimum interest rates) REPO auctions 1 day
5.25
5.25
Lombard and REPO auctions 1 week
5.25
5.25
3 months
6.75
6.75
6 months1
7.25
7.25
12 months
7.75
7.75
Liquidity absorption Open market operations (maximum interest rates) Deposit auctions 1 week
4.753
4.75
1 month
5.50
5.50
3 months1
6.50
6.50
Standing facilities (fixed rates) Deposit operations 1 day, 1 week1, call
4.00
4.00
Refinancing rate
8.00
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
.

15 June 2012

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