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VTB Capital analysts: The key rate and the signals of the regulator will remain the same
On Friday, October 26, a regular meeting of the Board of Directors of the Bank of Russia on monetary policy will be held, at which a decision will be made regarding the key rate. This meeting will be unsupported, and following its results a press conference is not scheduled. In a September press release, the regulator stressed that the main reason for the increase in the key rate is the risks associated with the high uncertainty of external conditions and their impact on financial markets.
Based on the current macroeconomic situation, analysts at VTB Capital believe that, at the end of the Friday meeting, the key rate will remain at the same level. They also do not expect significant changes in the signals emanating from the regulator.
According to analysts, the level of tension in the financial system has decreased. Since the beginning of the week, when the Board of Directors made a decision on the rate last time, the ruble strengthened against the dollar and the euro by 5,8% and 6,6%, respectively, against the background of the suspension of purchases of currency by the Bank of Russia. According to the press service of the bank, the yield of ten-year OFZs dropped by 38 bp to 8,68%.
According to analysts, inflation continues to grow, while economic growth rates remain slightly below 2%, while accelerated growth in mineral production makes a significant contribution. Experts believe that following the upcoming meeting, the Board of Directors of the Bank of Russia will leave the key rate at the current level of 7,50% and retain relatively harsh rhetoric, probably re-including in the press release the phrase that “the Bank of Russia will assess the feasibility of further increasing the key rates, taking into account the dynamics of inflation and the economy relative to the forecast. "