Russian Central Bank key rate will most likely stay unchanged; factors for increase still need to be assessed - Gref

ST. PETERSBURG. June 6 (Interfax) - The Russian Central Bank will most likely keep the key rate at 16% on Friday, while the likelihood of an increase still needs to be assessed, Herman Gref, President and Chairman of the Board of Sberbank said.

"You see that the inflation trend still persists, and it is higher than our forecasts; higher than the expectations of the Central Bank, and most likely, the rate will at least be maintained. In any case, there are no grounds yet for a reduction. There are no triggers that could lead to a reduction; we don't see it yet," Gref said, answering a question about a possible decision by the Central Bank on the rate at its board meeting on June 7.

He noted that there is a possibility of a rate increase, but this option has yet to be assessed.

"There is a possibility, but I think we probably still need more time to see what happens. The Central Bank makes decisions on its own, so predicting a decision, I think, is a thankless task," he said.

The next meeting of the Bank of Russia's Board of Directors on the key rate will be held on Friday, June 7.

Most analysts are considering the base option where the CBR maintains the key rate at 16% next Friday with a signal about a potential future tightening of monetary policy. At the same time, analysts note an increased probability of its increase at the June or July meeting to 17%-18%.