The Central Bank of the Russian Federation has reduced the key rate to 17%

— Our market fluctuated between a decline of 100 and 200 points, but the weakening of the ruble in recent days has rather tipped the scales towards a more cautious step.

— And this weakening happened in the last week. Did you personally have some kind of internal struggle in the last few days in connection with what was happening with the ruble?

— Our initial forecast was a 200-point step, we are being prepared for this by the economy, which is slowing down faster than expected, and inflation, which is doing the same. But the ruble has always been important for the Central Bank's decision-making, and most importantly, we still have another dark horse behind the scenes — budget projections, which will be announced before the end of the month.

— Why is the Central Bank again avoiding a targeted signal on monetary policy?

— It tries to influence the mood, not to give too much ground for optimism, but I think that now the market is quite neutral about this signal, because we have had exactly this signal for the last six months, and this did not prevent the regulator from starting a cycle of decline, continuing it and even at some points using broader steps, so it is just a signal.

— There has been a lot of talk on the market, especially in recent days, that it is quite possible that if the Central Bank lowers the rate to 16%, which did not happen, it will not touch it again this year, at least. But now that the scenario is different, what is your forecast?

— Frankly speaking, I think these are still marginal views that the rate will not decrease or will not decrease for a long time, yes, pauses are possible and were possible, they remain, including for playing out some external news or the ruble, or, for example, budget news, but this is a pause on the way, and not an end to the path to lowering the rate. We maintain our forecast for the end of the year at 15% and for movement into the range of 10-12% next year.

— The market has said a lot that even 16% is a lot. Will these 17% play any role, will they have any impact on the Russian economy? If so, when should we expect this effect?

— The most important thing now is for the downward movement of the rate to continue, because the downward movement is already included in long-term rates or in savings rates, in deposits. We all see that deposits are already going down to 15% before a year, it is already difficult to get a rate of 10% after a year, the same thing is happening with credit rates or OFZ yields, they include a further movement in the rate. It is important that it continues, then there will be no big shake-ups or negativity in the market.

— Decipher the regulator’s phrase: pro-inflationary risks still prevail over disinflationary ones in the medium term. What signal is this being sent now?

— Unfortunately, Russia remains a country where "black swans" are more likely to arrive than "white" ones. Our regulator is traditionally conservative and reminds us of this. It just so happens that in Russia any shock ultimately finds its reflection in an increase in inflation.

— 6-7% — this is the inflation forecast that the regulator maintains for this year. Is this more positive or neutral for us?

— Let me remind you that this is a forecast with a reserve, if we take the latest data, including August, inflation has slowed down to almost 8%, and we have a good chance of moving not just into this forecast range, but to its lower limit — closer to 6%. So, even if we now see some additional effect in prices from the weakening of the ruble, this fits comfortably into the forecast. There should be no surprises, which means it should not interfere with the further downward movement of the rate, which is also included in the latest forecasts of the Central Bank.