Bank of Russia discloses key rate decision-making routine

The Bank of Russia released its first information notice on the key rate decision-making and communication routine. Government officials, experts and journalists show a high interest in this process. In response to public demand, the Bank of Russia decided to issue information aimed at making key rate decisions more transparent and clear.

Tentatively, the process may be split into six stages. All of them are consecutively repeated in every key rate decision-making cycle. Every year, the Board of Directors holds eight meetings; each of them is preceded by a preparation cycle.

The decision-making process starts approximately one month before the Board meeting. The cycle is completed one or two weeks after the meeting. Every key rate decision is preceded by long discussions and calculations. This lays a solid analytical ground for the decision and allows discussing all the factors, shaping a sound opinion on the state of the economy and considering possible risks.

Once the decision has been made, it goes to another important stage — communication. This stage helps explain the reasons for this decision and its meaning to the public. In the follow-up to each Board meeting the Bank of Russia holds meetings with different target audiences, including businesses, government officials, analysts and investors. Recently, great importance has been attached to regional information campaigns. Such transparency makes an integral part of the inflation targeting regime.

The Bank of Russia will continue to fine-tune its monetary policy decision-making routine and communication with due account taken, among other things, for best global practices and suggestions of Russia’s expert and academic community.