The expert allowed the reduction of the Central Bank's key rate by 0.5 percentage points in March.

The most likely scenario at the March meeting is a reduction in the key rate by about 0.5 percentage points, unless unexpected events occur in the financial markets. Ruslan Spinka, Director of Sales and Customer Service at Fontvielle investment company, told Izvestia on March 12.

"In my opinion, at the next meeting of the Bank of Russia on March 20, the most likely scenario remains a moderate reduction in the key rate by 0.5 percentage points, unless some force majeure events occur in the financial markets during the remaining time. Now there is a rather rare situation when the gap between current inflation and the level of the key rate remains quite significant. Inflation is gradually slowing down, while the rate is still at a very high level," the expert said.

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At the same time, according to him, the Bank of Russia traditionally acts carefully to avoid sharp fluctuations in financial markets. An excessively rapid rate cut can lead to an increase in speculative demand for assets, accelerate lending, and increase pressure on the foreign exchange market. The weakening of the ruble, in turn, quickly translates into inflation, so the regulator is interested in moving in small steps and carefully monitoring the reaction of the economy and the financial market.

"In my opinion, the Bank of Russia's decision is now most influenced by the dynamics of inflation and inflation expectations, as well as the stability of the ruble. Even if the current inflation figures show a decrease, it is crucial for the regulator to make sure that this trend is sustainable and not short—term," said Spinka.

The expert recalled that medium-term inflation expectations for the annual horizon dropped to 13.1% in February. According to him, this indicator can also become one of the arguments in favor of a gradual easing of monetary policy.

On March 11, the Bank of Russia published a study in which it warned of the serious consequences of a sharp reduction in the key rate to 3%. Artificially stimulating demand will lead to short-term GDP growth, followed by a deep recession. High inflation expectations can lead to inflation of 20% in two years, 40% in three years, and more than 100% in seven years.

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