Russia Central Bank Leaves Rates On Hold
2011-08-04 12:20:15
Russia's central bank left interest rates unchanged for the second straight meeting on Thursday and signalled that monetary policy may remain on hold in the near future.
This, it said, was due to expectations of a bountiful harvest pushing down inflation risks: "Favorable forecasts for this year's grain harvest and the situation on global consumer markets allows us to speak of reduced inflation risks," the regulator said in a statement accompanying the decision.
Inflation--not long ago seen as a threat by the central bank--has stabilized since the start of the year. Weekly data released Wednesday showed consumer prices declining by 0.1%, their first drop in two years as food prices fall in the wake of the summer harvest.
Officials have said Russia is on track to harvest between 85 million and 90 million tons of grain this year, meeting initial targets.
On-year inflation stood at 9% in July, down from 9.4% in June, the central bank said.
The regulator also said it expects the current interest rate policy to provide a balance between inflation risks and growth aims for the next few months.
In a Dow Jones Newswires poll of eleven economists, all but one said the Bank of Russia will leave rates unchanged Thursday, with the lone holdout forecasting an increase in the regulator's deposit rate.