MOSCOW (Reuters) -Russian Economy Minister Maxim Reshetnikov on Monday urged the central bank to take slowing inflation into account when it meets to set interest rates next week, warning that Russia’s cooling economy is showing signs of “hypothermia”.
Grappling with stubbornly quickening inflation, Russia’s central bank has kept its key interest rate at 21% since October, tight monetary policy that has stifled investment just as the economic impact of soaring military spending starts to ease.
President Vladimir Putin In March urged his economic officials not to freeze the Russian economy as if it were in a “cryotherapy chamber” with high borrowing costs, which many analysts interpreted as a call to start an easing cycle.
Reshetnikov, speaking in the State Duma, Russia’s lower house of parliament, said that inflation in recent weeks had been in the 3-4% range when recalculated in annual terms.
“We expect that May data will consolidate this trend and we of course expect that the central bank will take duly take this into account when taking decisions because we also see risks of economic hypothermia in the current regime,” Reshetnikov said.
The ministry forecasts annual inflation for 2025 at 7.6%, an estimate that Reshetnikov described as “realistic”.
Major Russian exporters including Rusal and Gazpromneft have cut the planned volume of commodities like metal and oil products they send by rail, a Russian Railways document seen by Reuters showed last week, demonstrating the real-world impact of subdued demand as the country’s economy slows.
The central bank’s next rate-setting meeting is scheduled for June 6.
(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; editing by Guy Faulconbridge)
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