The Bank of Russia reduced the key rate to 11 percent from the previous 14%. According to Elvira Nabiullina, head of the Bank of Russia, the current reduction in the key rate does not create pro-inflationary risks. Moreover, the Central Bank allows further reduction at the next meetings.
The Central Bank also confirms the forecast for the growth of mortgages in 2022 by 10-15% against the background of the expansion of the state mortgage program. Corporate lending is expected to grow up to 5% this year, taking into account the reduction in the key rate and government support.
The slowdown in lending in Russia shows that monetary conditions in the economy are tight, but inflationary risks have noticeably decreased. The Bank of Russia has removed the inflation forecast for the end of 2022 at 18-23% from the rate press release, still predicts inflation of 5-7% in 2023 and 4% in 2024.