CBR Presser Ends – Some Key Comments From Nabiullina:

Rate Decision:

• "The decision is based on a significant review of macroeconomic forecasts... The notable policy step we have taken is needed in order to bring inflation in line with the target."* "Deposit and loan rates were not as quick to react to the policy rate adjustment as the OFZ bonds, today's decision is aimed at speeding up this process."
• "The neutral (policy rate) range remains at 5-6% given inflation close to 4%... It is premature to say whether this rate hike is going to be the last one in the policy tightening cycle."

Inflation:

• "The first signs of inflationary pressure weakening appeared in the first half of July but this is not yet sufficient to talk about sustainable inflation slowdown."
• "We must not put up with elevated inflationary expectations so that they do not anchor on this high level."

• Outlook Revision:
• "According to our forecasts, the OPEC+ oil output increase will add 0.1 percentage point to GDP growth in 2021 and 0.2-0.3 percentage point in 2022."
• "A good (grain) harvest may provide for more significant food price decline."

Risks:

• "There are signs of overheating in the unsecured loan market. Taking into account data for the last few months, we will decide on additional measures to cool down this segment."
• "Geopolitical risks are also something to which we continue to pay attention."