The central bank lowered the rate, but is still not ready to accelerate the monetary policy easing

Mikhail Ershov, Principal Director on Financial Studies, Head of the Financial Analysis Department at the Institute for Energy and Finance, commented to the Profile magazine on the inflation and interest rate changes.

The expediency of monetary policy changes is currently being discussed at the highest level, Mikhail Yershov says. However, the regulator, as before, broadcasts that there are external factors exerting pronounced pro-inflationary pressure on the Russian economy. This explains the logic of making all key rate decisions this year.

The expert does not rule out that in the second half of the year the short-term game will be even more restrained, despite the fact that affordable loans are needed to restore business activity. The topic is especially relevant in conditions when budget opportunities are limited and foreign capital markets are closed.

"Maintaining a high key interest rate for such a long period not only slows down economic growth, but also forces entrepreneurs to restructure business processes. In order to unfreeze investment projects and make the transition to a supply–side economy, companies need cheap borrowed funds," Mikhail Ershov is convinced.

He draws attention to the fact that it is not the inflation rate itself that matters, but the absolute price level. If it is high and does not decrease, it becomes a constraint on economic growth and consumption. Removing the obstacle is the responsibility of the Government, which is responsible for industrial policy, and, of course, manufacturers.