Russian Central Bank Maintains Key Rates 9/28/2010 4:50 AM ET
(RTTNews) - Russia's central bank left its key policy rates unchanged for a fourth month in a row on Tuesday saying that inflation risks are at an acceptable level and indicated that its policy stance is unlikely to change in coming months.
The Board of Directors of the Bank of Russia decided to keep the refinancing rate at a record-low 7.75%. The central bank had lowered the key rate fourteen times since April 2009.
In a statement, the central bank said it still believes that inflationary risks stemming from monetary conditions are at "an acceptable level". The bank further said it will continue to monitor the impact of various factors on inflation.
Russia's annual inflation as on September 20 was 6.7%, which was 0.6 percentage points higher than the previous month. The central bank noted that higher inflationary expectations linked to concerns over adverse weather conditions continued to exert pressure on prices of certain food groups in September.
However, several indicators of industrial activity and investment improved from the previous month in August though the signs of economic growth instability lingers, the bank noted. Employment indicators were stable and real incomes continued to grow. These creates conditions for further recovery in domestic demand, the bank said.
Citing these trends, the central bank said the current parameters of monetary policy are expected to ensure "an acceptable balance" between the main macroeconomics risks in coming months.
However, the increasing uncertainty in the global economy creates additional risks for the stability of the Russian economy, the bank noted. This makes it necessary to preserve the monetary policy stance to support domestic growth factors, it added.