CBR to assess the advisability of a rate hike in June, but the decision is not a foregone conclusion – the head of the department

MOSCOW, May 22 (Reuters) – The Bank of Russia will assess the feasibility of a key rate hike in June, but the decision is not a foregone conclusion, Cyril Tremasov, director of the central bank’s monetary policy department, was quoted by Interfax as saying.

He added that the regulator would traditionally assess the entire balance of risks to inflation.

“Since the February meeting, we said that we would assess the possibility of increasing the base interest rate. Our rhetoric, our signal stems from the fact that we see the preponderance of pro-inflationary threats: related to the labor market, the impact of external factors, and budgetary policy,” said Tremasow.

– The third meeting has been held since February, and the next one will take place on June 9. Yes, at this meeting we will assess the possibility of raising the interest rate, but this is not a predetermined decision. It will be important for us to assess the risk balance, we will try to understand how this risk balance has changed over time. The issue of raising the basic interest rate is acceptable if we actually see that the balance of risks is beginning to shift strongly towards pro-inflationary ones, said the head of the Central Bank’s department.

The next CBR meeting on the level of the key rate is scheduled for June 9, 2023.

In late April, the Bank of Russia kept its key interest rate at 7.50% pa for the fifth time, but warned that it may need to be raised at subsequent meetings if the regulator sees signs of accelerating inflation, jeopardizing the 4% CBR target in 2024 .

CBR estimates inflation in 2023 in the range of 4.5-6.5% after an 11.9% increase in prices last year.

(Moscow office)