The Central Bank of Russia once again kept its benchmark rate unchanged at 10.00% on Friday.
The central bank had previously indicated at its September meeting that it was done easing until 2017, so the decision did not come as a surprise.
The Russian ruble is stronger by 0.4% at 61.5445 per dollar as of 7:51 a.m. ET.
In its accompanying statement, the CBR noted that risks of inflation not reaching its 4% target in 2017 have “subsided somewhat.”
“At the margin, this supports our forecast that the easing cycle will resume in the first quarter of next year, with interest rates ultimately being lowered by more than most expect in 2017-2018,” William Jackson, the senior emerging markets economist at Capital Economics, wrote after the announcement.
Notably, inflation decelerated to 5.8% year-over-year in November — the lowest rate since July 2012 — from the prior month’s reading of 6.1%.
“For our part, we think the combination of spare capacity in the economy and weak demand will eventually bring inflation down further and we expect it to near the bank’s target by mid-2017,” added Jackson.