The Central Bank will discuss reducing the rate at its next meeting

The market is expecting a reduction in the key rate, and the Central Bank is giving signals that the reduction following the meeting may be even more than one percentage point

The Central Bank will discuss reducing the key rate in July. This was stated by the head of the regulator Elvira Nabiullina, emphasizing that such a decision is not guaranteed.

The Russian currency barely reacted to this statement. The dollar exchange rate on Forex is still 79 rubles. At the same time, the Ministry of Finance reported that the budget in July may lose almost 26 billion rubles in oil and gas revenues. Analysts say that the main reasons for the decline in export revenues are the fall in oil prices and the strong ruble. Nabiullina was extremely careful in her statements. According to her, the decision on the rate at the July meeting will be made carefully and based on the current economic situation. Nabiullina emphasized that expectations of a rapid reduction in the key rate may reverse the trends, and then the rate will have to be raised, not lowered.

Kirill Tremasov, an adviser to the head of the Bank of Russia, added a bit of specificity. On the sidelines of the Central Bank's Financial Congress, he told journalists that the regulator would "without a doubt" consider the option of reducing the key rate by at least 1 percentage point. There are grounds for this: inflation has ceased to be double-digit. However, Tremasov also reported that raising housing and utilities tariffs above inflation carries risks and could contribute to a tightening of monetary policy.

Nevertheless, the market is expecting a reduction in the key rate. And it may be even more significant than the level that Nabiullina's adviser is talking about. Financial expert Mikhail Khanov does not rule this out:

Mikhail Khanov financial analyst that there will be some changes to my personal, again, - fuck n

Carry trade is when speculators sell one currency to invest in another. In this case, in Russian currency, due to the good yield of ruble instruments in the context of high rates. Moreover, according to analysts, non-residents have been increasingly playing this game lately, despite sanctions and obvious problems with the withdrawal of unfriendly currencies from Russia.

The strengthening of the ruble and the fall in world oil prices are having an increasingly strong impact on the budget. In July, it will lose 26 billion rubles in oil and gas revenues — this is the Finance Ministry’s expectation. For comparison: in June, according to the department, 7 billion rubles were lost.

In order to at least partially close this hole, the ministry will start selling currency from reserves - almost 19 billion rubles over the next 30 days. The decision is ambiguous in the current conditions, notes Ruslan Klyshko, director of the wealth management department at AF Capital Management Company:

Ruslan Klyshko, Director of Wealth Management Department, AF Capital Management Company

Maintaining a strong ruble will provoke an increase in Russia's budget deficit. This was written in a column for Vedomosti by Dmitry Pyanov, First Deputy President and Chairman of the Management Board of VTB. He believes that by the end of the year the deficit could reach 5 trillion rubles.

The head of the Central Bank does not seem to be very concerned about this. Nabiullina called the weak exchange rate of the national currency a sign of a vulnerable economy. According to her, this is "a consequence of chronically high inflation and mistrust of our own currency." "This is hardly what we are striving for," Nabiullina added.