The expert ruled out the devaluation of the ruble due to the reduction of the Central Bank of the Russian Federation key interest rate

The reduction of the key rate planned by the Central Bank of Russia does not mean a devaluation of the ruble. However, the slowdown in inflation sends a clear signal to the economy. This was announced on August 25 by Lazar Badalov, Associate professor at the Faculty of Economics of the RUDN University.

"The rate decreases when inflation slows down. Accordingly, there should be a situation when the ruble exchange rate will be stable. This is not exactly the devaluation that is being discussed now," he said in an interview with the Prime agency.

According to Badalov, lowering interest rates will be able to revive the economy and help the ruble strengthen. He also noted that the Central Bank is sending a signal to citizens, businesses and the state, which shows a link between slowing inflation and the economy.

The expert stressed that lowering rates implies devaluation, but this will increase the activity of all economic agents.

"We need to apply other mechanisms to stimulate growth with the current slowdown," he concluded.

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Nikolay Kulbaka, PhD in Economics, Associate Professor at RANEPA, announced on August 21 that the Central Bank of Russia may reduce the key rate by a maximum of two percentage points by the end of the year. He added that everything will depend on the dynamics of inflation in the autumn, which cannot be predicted at the moment. As a rule, prices always rise during this season, the expert noted.

At a meeting on July 25, the Central Bank of the Russian Federation lowered its key rate to 18% per annum. It was noted that further decisions on the key rate will be made depending on the sustainability of the slowdown in inflation and the dynamics of inflation expectations. According to the Central Bank's forecast, annual inflation will decrease to 6-7% this year, and return to 4% in 2026. The head of the regulator, Elvira Nabiullina, said that the Central Bank allows for a reduction in the key rate by 1, 1.5 or 2% in the future.

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