Excerpt from the statement by the Board of Directors:
GDP growth rate decreased substantially in the second quarter of 2013 mainly due to decline in manufacturing and construction. In July, production activity indicators and investment demand remained subdued. Consumer demand supported by the real wage and retail lending growth remains the major driver for the economic growth. The unemployment rate stays at the relatively low level.
According to Bank of Russia estimates, the risks of persistently low economic growth continued to be related to subdued investment activity and sluggish recovery of external demand.
In August and in the beginning of September, consumer inflation growth rate continued to decrease, though staying above the target range, and as of 9 September 2013 was estimated at 6.3 percent year on year. Based on Bank of Russia estimates, given the expected improvement of food market conditions due to favourable assessments of this year harvest, the inflation is expected to get back to the target range by the year-end. Given unchanged monetary policy stance and continuation of the current macroeconomic tendencies, the inflation will continue declining in 2014. At the same time, to ensure inflation target achievement in the medium term constructive trends in inflation expectations are to be formed.
According to Bank of Russia estimates, given domestic and external macroeconomic trends the level of money market interest rates ensures the balance between inflations risks and risks of low economic activity for the nearest future.
The Bank of Russia will continue to monitor inflation risks and the downside risks to economic growth. In making monetary policy decisions the Bank of Russia will be guided by the inflation objectives and economic growth prospects.
The Bank of Russia declares the interest rate on Bank of Russia one-week liquidity provision and absorption open market operations (5.50 percentage per annum as at 13 September 2013) to be Bank of Russia key rate, starting on September 16th. The Bank of Russia will use the key rate as the main indicator of the monetary policy stance.