Moscow, May 30 (IANS/RIA Novosti) The board of directors of Russia’s central bank Monday left the bank’s refinancing rate, its credit rate benchmark, unchanged at 8.25 percent but raised deposit rates by 0.25 percentage points from May 31.
‘The decision was taken given the persistently high level of inflationary expectations and risks for sustainable economic growth,’ the regulator said in a statement.
‘It was also taken into account that due to a certain liquidity surplus in the banking sector, the Bank of Russia’s deposit rates play a key role for money market rates. Moreover, a narrower corridor of Bank of Russia’s interest rates will contribute to lower volatility of money market rates and higher interest policy efficiency.’
Russia’s annual inflation reached 9.7 percent as of May 23, above the official target of below 7 percent in 2011.
Inflation this April and May was higher than in the first half of last year when the economy was recovering after the crisis, the central bank said, adding that inflationary pressure remained high.
‘The unemployment level, including seasonally adjusted figures, has increased,’ it said.
‘The volume of industrial production grew compared to March, however, its annual growth fell again. Annual investment growth rates became positive for the first time since the start of the year, but remain extremely low.
‘Higher retail sales of the last several months compared to households’ income growth and a more active household crediting and slower deposits growth show that the population may tend to save less, which may become a factor in growing economic activity as well as inflationary risks.’
