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Monetary Policy and Inflation in July 2022

Yury N. Perevyshin – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute for Economic Policy; Director of Center for Central Banks Studies of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Following the meeting on July 22, the Bank of Russia cut the key rate by 150 bp at a time to 8% per annum, while most analysts expected the rate reduction by 50 bp The decision was motivated by the slowdown in current inflation, lower inflation expectations of households and businesses, as well as weak consumer demand. The Bank of Russia has strengthened the signal on the further dynamics of the key rate compared to the last press-release, however it is still rather soft, which indicates a continuation of the monetary cycle easing in H2 2022. The updated range of the average key rate value for 2022 allows for its reduction to 6.5% by the end of the year.

Key words: inflation, monetary policy, key rate, capital outflow, Bank of Russia.

JEL-codes: E31, E52, F31.