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Bank "Otkrytie": the market is expecting an increase in the key rate to 7%
On the eve of the next meeting of the Board of Directors of the Bank of Russia, an increase in the key rate is expected in the financial market. Otkritie Research forecasts growth of 0,5 pp. up to 7%.
According to the press service of Otkritie Bank, there were no statements from the regulator regarding such forecasts. According to Maxim Petronevich, a senior economist at the Otkritie Research analytical department of Otkritie Bank, such a lack of oral intervention by the regulator indicates that these expectations are satisfactory. This means that the decision on the rate with a high probability will turn out to be exactly the same. At the same time, one cannot exclude the option of a more conservative increase step - by 0,25 percentage points.
The key rate is likely to start increasing moderately due to the slowdown in most macroeconomic indicators by the same period in 2019. The only exceptions are oil production and retail. Thus, the growth of industrial production slowed down to 0,7% compared to the same period in 2019. Construction slowed down as a result of reformatting state mortgage subsidy programs from a peak of 18% in June 2019 to 11,3%. The dynamics of paid services also turned out to be negative - with a decline of 2,8%, a decrease of 4,6%. Only the retail trade turnover, which grew by 4,2%, and oil production, where the magnitude of the decline decreased by almost 1% to 6,8%, maintained or improved their positive results.
Also, since June, experts have noted a decline in inflationary expectations of the population. However, they still remain high - and a significant inflow of deposits in July due to a noticeable increase in deposit rates. Since the last meeting, the maximum interest rate on deposits has increased from 5,5% to 6,2%.
The Board of Directors of the Bank of Russia will make a decision mainly on the basis of data on prices for August. The operational data for the last two weeks indicate a possible surge in inflation. However, these data cover less than 40% of items relevant to the underlying CPI and important for monetary policy purposes. Therefore, the complete data for August may be a surprise in any direction.
With regard to the action of such a significant pro-inflationary factor as pre-election payments - to pensioners, children, the military in the amount of about 700 billion rubles. - At the end of August, the Bank of Russia commented that, in general, it was already taken into account in the July inflation forecast, when the key rate was immediately raised by 1 percentage point. If this is actually the case, then the key factor in the decision will be the fact whether Rosstat will confirm the surge in price increases in inflation data.