Nabiullina explained the risks for PREP with a sharp decrease in inflation

Reducing inflation without slowing inflation expectations may reduce the space for monetary policy easing. This was stated on February 13 by the head of the Central Bank of Russia, Elvira Nabiullina, answering a question from Izvestia.

"We are analyzing inflation and inflation expectations. They are interconnected, because if inflation is low enough, <...> [and at the same time] inflation expectations will be high, people will make decisions based on inflation expectations. <...> The risk that inflation will not stay at [the level of] 4% is elevated. That is <..."high inflation expectations mean less room for rate cuts," she said.

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