Russia’s central bank decided to keep rates on hold at its latest monetary policy decision on Friday, a move widely expected as inflation remains stubbornly high.
The central bank held its key interest rate at 11 percent, citing “growing inflation risks while the risks of economic cooling remain.”
The bank said that as inflation risks recede, it “will continue with a downward revision of its key rate, to be decided at one of its forthcoming Board of Directors meetings.”
The bank believed that inflation, currently high at 15 percent although it has trended downwards, was hopefully heading in the right direction. It predicted annual consumer price growth of 6 percent by the end of 2016, close to the bank’s target of 4 percent in 2017.
Speaking to CNBC from Moscow, Simon Fentham-Fletcher, chief investment officer at Freedom Asset Management, believed the bank had “missed a trick.”
“The weather here is cooling rapidly and the Russian economy is cooling absolutely faster and the real economy is really struggling and there are inflationary pressures but on the whole, the downside risk to Russia is a stagnating economy and that’s significantly being impacted by high interest rates,” he told CNBC.