Russia signals interest rate cuts may be over

Bloomberg

Russia’s central bank signalled it’s close to taking a pause from easing monetary policy after delivering the smallest interest-rate cut of the current cycle, as renewed risks of inflation prompt more caution.
Governor Elvira Nabiullina said “we are close to the conclusion of the easing cycle,” with the central bank describing current monetary conditions as “overall neutral.”
Policy makers lowered their benchmark to 7.5% from 8%, in line with the forecasts of most economists surveyed by Bloomberg.
“The next step, besides holding the rate, may be an increase, but we do not exclude a decrease,” Nabiullina told reporters after the policy announcement, adding she was “worried” by the recent rise in inflationary expectations.
The ruble held losses after the decision, trading 0.4% weaker against the dollar.
With borrowing costs already below their level before the invasion of Ukraine, the urgency to revive the economy after the shock of international sanctions is giving way to worry that consumer costs could be harder to contain in the months ahead.