CBR to assess advisability of rate cut in April, proposals for pause possible - CBR advisor

MOSCOW. April 9 (Interfax) - The Central Bank of Russia (CBR) will assess the advisability of further lowering its key interest rate, but there might be proposals for a pause in cuts in April, the advisor to the CBR governor, Kirill Tremasov said.

"The CBR has been lowering the key rate for a long time. At its April meeting the CBR will assess the advisability of lowering the rate, and proposals for a pause might also be voiced," Tremasov said at a briefing on Thursday.

He said the CBR's decision will be influenced, among other things, by inflation data for March, which the Federal Statistics Service will release on April 10. The situation in the Middle East has become a pro-inflationary risk, he added.

Persistent inflation remains in the range of 4-5%, Tremasov said. Price growth predictably slowed in February after temporarily accelerating in January, and at the CBR's board meeting in March some expressed the opinion that persistent inflation is even closer to 4%, he said.

"The [fiscal] rule itself remains, so oil prices should not have a strong impact on the exchange rate," Tremasov said.

On the other hand, there is the Middle East situation's impact on the Russian economy, he said. The growth of prices for oil, fertilizer and other commodities could accelerate inflation in developed and developing countries.

"It's quite clear that in future this could also increase inflationary pressure here [in Russia]," Tremasov said.

The participants in the discussion about the key rate in March concluded that the developments in the Middle East carried additional pro-inflationary risks for Russia. The extent of these risks will be assessed at the CBR board's April meeting on the rate, Tremasov said.