Guidelines for the Development of the Russian Financial Market

Bank of Russia RUSSIAN MACRO UPDATE The Central Bank of the Russian Federation MONETARY POLICY Gradual transition from moderately tight to neutral monetary policy Inflation and inflation expectations . Annual inflation remains low Ruble weakening in April will quicken inflation movement to 4% 22 22 Decision (as of April 27, 2018) Uncertainty is in place over how inflation expectations will respond to the April developments in financial markets Monetary Conditions Neutral interest rate has shifted closer to the upper bound within the range of 6-7% Economic activity Business activity keeps on expanding and is hardly posing any disinflationary pressure on consumer price dynamics Medium-term outlook on economic growth remains unchanged The Bank of Russia keeps the key rate at 7.25% p.a. Signal Pro-inflationary (^) and disinflationary (↓) risks Fluctuations of food and oil prices ↑↓ Inflation expectations Possible changes in consumer behavior ←← Wage dynamics ↑ Volatility in the financial markets and heightened geopolitical tensions ↑ Uncertainty surrounding the parameters of the fiscal decisions The Bank of Russia still assumes that the monetary policy will become neutral in 2018. The Bank of Russia will base its decision-making upon assessments of inflation risks, inflation dynamics and economic developments as compared against the forecast.

View entire presentation