MOSCOW (Sputnik) — The most important thing in Russia's monetary policy is not to change the Central Bank's interest rate in order to ensure the ruble's stability, Russian President Vladimir Putin said Thursday during his annual "Direct Line" call-in session.
"The most important thing for us today is not even this key rate itself, but that it does not change abruptly. We need to ensure the stability of the national currency, the stability of the ruble. In this sense, the Central Bank acts very carefully," Putin said.
Russia has been hit by a downturn that began in early 2015 after falling oil prices and Western anti-Russia sanctions took bite. The country's GDP fell 3.7 percent in 2015, according to the Russian Federal Statistics Service Rosstat.
The Russian Central Bank’s interest rate is currently 9.25% percent. On May 2, the bank reduced its level by 0.5% percentage points. This is the second time the Central Bank reduces the interest rate this year, the first time the rate was lowered 0.25%.
The Central Bank Board of Directors will hold a new meeting dedicated to interest rate issue on June 16.
The Russian Central Bank has implemented a tight monetary policy with the aim of reach the 4 percent inflation mark by late 2017.
Putin said he expected that the Central Bank would continue to act carefully while reducing the key interest rate.
"I hope very much that the Central Bank will further act in a careful manner, but to act in order to reduce the key rate," Putin said.
The president also explained why the Central Bank was so cautious in its monetary policy.
"Unfortunately, our economy still depends on sales of raw hydrocarbons — oil and gas," Putin said, adding that the Central Bank had to adjust the key interest rate in accordance with the oil price's changes.