Russia will probably leave interest rates unchanged for a seventh month as inflation holds more than a percentage point above above the central bank’s target range.
The refinancing rate will remain at 8.25% when policy makers meet in Moscow on April 2, according to 17 of 21 economists in a Bloomberg survey. Four forecast a quarter-point cut. The overnight and one-week auction-based repurchase rates, the main instruments used to provide banks with cash, will be held at 5.5% and the deposit rate will stay at 4.5%, two other surveys showed.
Inflation that reached an 18-month peak is hamstringing a move by policy makers to use monetary stimulus to lift an economy expanding at the weakest pace since 2009. Chairman Sergey Ignatiev, whose final term ends in June, has said he’d consider cutting rates once inflation falls as the government considers widening the regulator’s mandate to promote economic growth.
“As far as easing, I think it’s more likely to spur inflation than growth,” Sergey Shvetsov, a deputy chairman of the central bank, said today in Moscow at a conference organized by the Vedomosti newspaper. Russian corporate loan rates, adjusted for inflation, are comparable with European borrowing costs at about 3%, he said.
The average rate on ruble-denominated loans to companies was 10.2% in February, up from 10% a month earlier and a 2012 low of 9.2%, central bank data show. Inflation accelerated to 7.3% in February from a year earlier.
Three-month borrowing costs may rise three basis points, or 0.03 percentage point, in the next three months, down from an increase of as much as 15 basis points on March 27, according to forward-rate agreements tracked by Bloomberg. The ruble added 0.2% to 31.0245 against the dollar.
Yields calculated based on non-deliverable ruble forwards today showed one-month rates tumbling 36 basis points since March 19 to 6.28% as of 5:10 p.m. in Moscow. The ruble advanced for the first time in three days against the dollar, appreciating 0.2% to 31.0350.
The central bank left all rates unchanged for a sixth month on March 15, saying inflation remained at 7.3% in early March -- unchanged from February. It also cited factors including a surge in food costs and prices regulated by the state. The economy continues to show some signs of deceleration, the regulator said.