Analyst: due to the reduction in the key rate, the dollar will rise

      On June 6, the Bank of Russia lowered its key rate by one percentage point to 20% per annum. We asked the analysts if they had expected this and what forecast they could give for the coming months.

      Vladimir Chernov, Analyst at Freedom Finance Global:

      "I allowed for a rate cut at the regulator's meeting and gradually increased the likelihood of such an outcome, based on macroeconomic indicators and, first of all, against the background of a slowdown in inflation and a decrease in its annual values below 10% per annum ahead of the Central Bank's forecast expectations. However, due to the increase in inflation expectations of the population in May 2025 to 13.4% after 13.1% a month earlier, there was still a higher probability of a rate cut at the July meeting of the regulator.

      Now we can say that a long-term cycle of easing the monetary policy of the Bank of Russia is likely to begin, so in July we can expect another reduction in the key refinancing rate. At the same time, if the disinflationary trend continues, then in July the rate cut may be wider, immediately by 200-300 bps, since after the June decision of the Central Bank, inflation expectations of the population and enterprises will have to begin to decline.

      The decision will not have a significant impact on the volume of lending in the country, as the rate of 20% per annum still looks prohibitive. However, this decision should push the Moscow Stock Exchange index to grow around 3,000 points, and the dollar exchange rate above 80 rubles."

      Olga Belenkaya, Head of the Macroeconomic Analysis Department at Finam Financial Group:

      "We believed that the main option would be to keep the key rate at 21%, not excluding the option of lowering it. Analysts' opinions were divided between maintaining and lowering the key rate.

      The Central Bank maintained a neutral signal: "Further decisions on the key rate will be made depending on the speed and sustainability of the decline in inflation and inflation expectations." It is reiterated that the Bank of Russia will maintain such tight monetary conditions as are necessary to return inflation to its target in 2026. This means a prolonged period of tight monetary policy.

      In our opinion, the regulator is trying to make it clear to the market that the current reduction is rather an adaptation of the rigidity of the PREP to a slowdown in inflation, without declaring an intention to continue the series of rate cuts. The current decision is positive for the market, although moderate due to the neutral signal."