The economist predicted a 1% reduction in the key rate at the upcoming meeting.

At a meeting on October 24, the Central Bank of Russia may decide to reduce the key rate by one percentage point to 16% per annum, despite prevailing forecasts that it will remain at the current level. This opinion was expressed by Alexey Zubets, Director of the Institute of Socio-Economic Research at the Financial University under the Government of the Russian Federation, in an interview with Izvestia on October 21.

According to him, such a decision may be dictated by political considerations and the need to avoid confrontation with the government and the business community.

The expert noted that leaving the rate at 17% would be perceived as a challenge to the country's economic interests and could strengthen negative trends in the economy. With current forecasts of GDP growth of about 1% per year, maintaining tight monetary policy risks leading the economy to negative values in 2025.

"Therefore, in order to avoid any political conflicts and not to take such an aggressive position, I think that the Central Bank will reduce the rate by 1% point, despite the fact that the basic forecast is that the rate will not be lowered, I think that it will be lowered by 1% point," - the economist shared it.

Autumn frosts: the market expects the key to remain at 17% in October

The regulator may take a pause in rate cuts until the end of the year.

However, Zubets stressed that even a reduction to 16% would not have a significant impact on economic activity, since any rate above 15% is considered prohibitive by businesses.

The expert explained that the normal rate for the economy should be about 12%, but its achievement in the near future is unlikely. At the same time, the continued persistence of an excessively high interest rate may lead to irreversible structural changes in the economy, when enterprises will be forced to close due to the unavailability of credit resources.

Zubets warned that maintaining the rate at a prohibitive level for too long can cause qualitative negative changes that will subsequently be impossible to correct. A rate cut, even a symbolic one, can be an important signal for the market and will avoid further deterioration of economic dynamics, the expert concluded.

Finance Minister Anton Siluanov said on September 9 that it is currently necessary to lower the key rate and rates in the economy, for which actions on a balanced balanced budget are justified. According to him, the Central Bank is currently closely monitoring the budget deficit and its impact on monetary policy.

All important news is on the Izvestia channel in the MAX messenger.