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. Last Updated: 07/27/2016

Central Banker Considers Additional Rate Cuts

ISTANBUL — The Central Bank has scope to cut rates again this year and next as inflation will likely come in lower than expected, but the pace of easing is unlikely to pick up, First Deputy Chairman Alexei Ulyukayev said.

Russia has already cut rates by 300 basis points since April taking the benchmark refinancing rate down to 10 percent in a bid to help the economy out of its first recession in a decade.

“The speed is already very fast — in two weeks [we] cut by 50 basis points, so I doubt we can move at a greater pace,” Ulyukayev told reporters on the sidelines of an IMF meeting.

Analysts see the refinancing rate at 9.50 percent by year-end, and inflation for 2009 at 11 percent.

As rate cuts filter through into cheaper loans for end-borrowers and the economy stabilizes, the Central Bank expects nominal lending growth of 12 percent to 15 percent in 2010, Ulyukayev said.

He also reiterated that the current strength in the ruble was not a cause for concern, and the Central Bank’s priority was to smooth out excessive volatility of the exchange rate. “We are just extinguishing excessive swings,” he added, noting that the Central Bank had bought less than $100 million in the first two trading days of October.