The Central Bank of Russia could launch a rate-cutting race after the inflation rate in Russia stabilizes at quite a low level, vice PM Arkady Dvorkovich said at the Russian Economic & Financial Forum.
As the vice prime minister thinks, if inflation runs below 5%, it will be possible to make clearer financial models of any projects, determine investment flows and not to price in global risks.
"After the Bank of Russia becomes confident that these numbers (regarding to inflation – editorial note) are stable, I think that the Central Bank will begin to bring interest rates gradually down, thereby allowing to snap a negative trend in investment that has been seen over the past few years," the vice prime minister said.
In the meantime, the government itself should maintain budget policy stability and exclude the risk of sharp tax hikes, and also to confirm its state programs.
Dvorkovich noted that, according to the official projections, Russian GDP could grow 1-2% after a decrease in previous years, while inflation could run at around 4.7%.
"This brings hopes for two things. The first is that interest rates will go gradually down and credit conditions for the economy will improve. And the second one is that there will be more certainty about further macroeconomic parameters, narrower volatility of all indicators that impact the investment climate and economic development of the country, as a whole," he pointed out.
