In a decision on April 27, to keep its key rate static, Central Bank said it was unwavering on its estimate of risk outlook tied to oil price volatility.
In a decision on April 27, 2018, to keep its key rate static, the Central Bank of Russia said it was unwavering on its estimate of risk outlook tied to oil price volatility.
The bank kept its key rate stable at 7.25 % annually. The inflation outlook is low, but the value of the national currency was under pressure from geopolitical tensions. Inflation is forecast to run between 3 and 4 % for the year and consumer prices are on par with those in advanced economies, but the bank said
it recognized there may be some underlying risk.
Western-backed sanctions target Russian energy companies, creating pressure on some of the largest sources of revenue for the government. Russia, however, is party to an effort steered by the OPEC
to curb supplies and that effort is credited with higher oil prices.
«The Bank of Russia leaves unchanged its estimates of risks associated with consumer and oil price volatility, wage movements and possible changes in consumer behavior,» it said of its rate decision.
Crude oil prices
have been supported elsewhere by geopolitical risks
, ranging from the multilateral involvement in Syria's civil war, Middle East tensions and a pending U.S. decision the Iranian nuclear deal.
OPEC economists said they expect Russian manufacturing and service sectors to slow down, but that could be offset by growth in household consumption. Fourth quarter gross domestic product increased 0.9 % in Russia, following 2 quarters of 2 % growth. Full-year GDP growth is forecast at 1.8 % , compared to 2.7 % growth expected in the United States this year.
The U.S. Treasury Department this week opened a safety valve by offering some sanctions relief to Russian aluminum producer United Co. RUSAL, the 2nd-largest company of its kind outside of China.
relief put the aluminum market in a nose-dive as the risk premium faded, causing ripple effects throughout broader commodities. The price
for Brent crude oil was down almost 1 percent following Monday's announcement from the Treasury, but recovered some ground later in the session.
Author: Daniel J. Graeber
Source : Neftegaz.RU