Russia's central bank on Friday kept its benchmark interest rate unchanged for the sixth consecutive month as inflation pressures remained high and economic activity continued to weaken. The decision was in line with economists' forecast.
The Bank of Russia retained its refinancing rate at 8.25 percent. The bank also retained its one-week repurchase rate, which is used to provide banks with cash, at 5.5 percent and the overnight deposit rate at 4.5 percent.
The bank said that latest economic indicators signal that the economic slowdown is set to continue in the near term. Investment growth remained weak, and retail trade has recorded slower growth in the beginning of the year.
However, economic sentiment and labor market conditions have been positive, creating conditions suitable to support domestic demand, the bank said.
Russia's annual inflation stayed high at 7.3 percent in March, which was in line with the central bank's forecast, and far above its target.
Earlier this week, President Vladimir Putin named his close aide Elvira Nabiullina to head central bank after government's calls for lowering borrowing costs were repeatedly ignored by the current policymakers. The appointment is seen as a strong indication that the bank will lower rates in the second half of the year.
In February, the bank said it expects inflation to stay above the target range during the first half of 2013. It also noted that given the still relatively high bank lending growth rates, the risks of a significant economic slowdown stemming from the tighter monetary conditions are minor.
The economy expanded 3.4 percent in 2012, down from 4.3 percent a year earlier, official figures showed in January. The government aims to achieve a growth of at least 5 percent.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.