June 14, 2019 / 12:18 PM / 4 months ago

HIGHLIGHTS-Quotes from Russian central bank chief's news conference

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MOSCOW, June 14 (Reuters) - The following are highlights from Russian central bank chief Elvira Nabiullina’s news conference following the bank’s interest rate decision:


“A sustainable trend in the slowing of inflation has appeared... Inflation passed its peak in March and stood at 5.3%, slightly below our expectations. The rate at which inflation is slowing is overall in line with our forecast.”

“We cannot rule out that there could be disinflation in the summer or in September.”

“The rouble’s strengthening since the start of the year is also a factor that has contributed to the slowing of inflation. This has been facilitated by higher oil prices and overall favourable conditions on financial markets. International investors’ interest in Russian assets has returned. This has been especially visible on the OFZ (treasury bond) market.”


“If the situation develops according to our baseline scenario, we will consider further rate cuts at one of the upcoming board of directors meetings. We are considering the possibility of a neutral policy by the middle of 2020.”

“We have signalled that it is possible to transition to a neutral rate by mid-2020. This means that one or even two rate cuts are possible this year if the situation develops in accordance with our baseline scenario, if there are no negative surprises.”


“Economic growth in the first half of the year has been slower than expected. We had forecast a certain drop in business activity at the beginning of the year because of the following factors: the hike in the value-added tax (VAT), and possibly, a slight slowdown in global economy growth and in demand for Russian goods and services, as well as the timeline for the completion of major national projects, which mostly falls in the second half of the year. Some of these factors had a greater impact than expected.”


“There are still some uncertainties surrounding the results of the OPEC+ talks. We expect that coordination among the participants in the deal (to cut global oil output) will ensure a smooth dynamic in oil prices.”


“Inflationary risks for the year have decreased. First of all, we no longer expect a delayed effect of the VAT hike. Secondly, since the start of the year, the U.S. Federal Reserve has consistently softened its rhetoric amid expectations of a global economic slowdown. All other things being equal, this limits the risk of significant capital outflow from emerging market countries.”

“(In the rate cut) we took into account that inflationary expectations among the population and the business community remain elevated in relation to the inflation target and the minimum levels reached in the first months of 2018... We expect that lowering inflation to 4% will decrease the inflationary expectations of the population and the business community.”


“After GDP growth of 1-1.5% this year, we expect that it will gradually accelerate to 2-3% in 2021. But out forecast will largely depend on the timing and the effectiveness of the completion of national projects, as well as other budget policy decisions.” (Compiled by Darya Korsunskaya and Gabrielle Tétrault-Farber; editing by Maria Kiselyova)

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