One of the variants of changes in the key rate of the Bank of Russia at the last meeting of the Board of Directors was reduced to four steps — same solution could be discussed and next, said the head of the Central Bank Elvira Nabiullina. Higher inflation in April, exhausts itself quickly enough and the Central Bank can more actively to reduce the rate including below the level of inflation. Another news is a change in the estimates of the contribution of the oil down in the forecast of dynamics of GDP in 2020: it would probably be lower and the contribution of net “coronavirus” effect may be higher.Regular Friday press conference of the head of the Central Bank (weekly in may, they will not be held next year — may 22) slightly adjusted ideas about what actions the Bank of Russia considers rational in the current monetary policy in response to new economic risks associated directly and indirectly with the pandemic. The key rate was reduced at the last meeting of the Board of Directors of two steps (by 0.5 p. p., it caused a certain enthusiasm among analysts — previously the Bank of Russia is rarely discussed steps at a rate less than one step) can be further reduced stronger signaled Elvira Nabiullina. In addition, the answers to the questions Ms. Nabiullina confirmed that he sees no problems in lowering the key rate below the current levels of inflation, if it is rational for achieving the objectives of the Central Bank to achieve the target.Such a scenario still seems unlikely, however, the signal CB looks very sharp: even a small opportunity in June 2020 to have an interest rate at 4.5% per annum by most analysts is not considered. Meanwhile, the Bank of Russia confirms the previously made predictions and the nature of economic development in conditions of epidemic restrictions of economic activity and the GDP in 2020 (minus 8% in the second quarter, followed by reduction). Substantive news in the policy of the Central Bank Elvira Nabiullina announced, apparently, the largest “practical” message was a statement about coming in late may start of the program long-term repo (month and year, subject of the transaction — OFZ and most highly ranked regional loans) on the future extension of the limits of “salary” preferential loans 25%, up to 200 billion rubles.— a program focused on small and medium businesses, will be available to large companies. However, for accurate interpretation of these data is still little information. The nature of the payments in early may, he says, was confirmed by the head of the Central Bank, on the stabilization of economic activity at a reduced level in late April — that is, the deterioration of the situation, at least for now, is not observed.The Central Bank may disturb the situation is with inflation. According to the head of the Bank of Russia, current inflationary s��measures (like the measurement of inflation expectations) “noisy” growth index potreban with a 2.5% year-on-year in March to 3.1% in April may be temporary, weekly measurements of Rosstat say that the acceleration of inflation may exhaust itself in may. In this situation, the disinflationary factors can act much stronger than previously thought— perhaps a demonstrative willingness of the Central Bank drastically (by the standards of recent years) to reduce the key rate to do with this. In the latest report on the OST (.pdf), the Bank of Russia considered “the contribution of oil” more than “the contribution of the epidemic”, but the assessment of Elvira Nabiullina of the contribution of oil prices, this at a press conference, low is 1 p. p. it is Not excluded that the Bank of Russia changed his point of view on this issue based on new data.Dmitry Butrin
