Russia's Inflation and Monetary Policy in June 2015

Abstract

Further stabilization of inflation and the ruble exchange rate allowed the Bank of Russia Board of Directors to further cut the key interest rate to 11.50% p.a. on 15 June 2015. The cut was triggered by the fact that Russia’s economy was still facing serious risks of a downturn amid weakening inflation risks. The Bank of Russia announced on 14 May that it will resume its interventions to buy foreign exchange, $100m to $200m on a daily basis, in order to increase the international reserves. In May 2015, consumer prices increased 0.4% (0.9% in May 2014), i.e. down 0.1 p.p. from April 2015. As a result, inflation in May 2015 stood at 15.8% compared to May 2014. The Consumer Price Index increased 0.2% in the fi rst 22 days of June 2015, showing a substantial slowdown.