-Russian Central Bank increases interest rates as expected
The Central Bank of Russia increased interest rates in line with expectations as inflation risks increased due to the 2 percent VAT increase that will take effect in the country as of Jan. 1, 2019, along with recent oil price volatility.
The bank increased interest rates by 0.25 basis points to 7.75, following last Friday’s meeting.
According to the bank, the year-end inflation rate is expected to be 4 percent and growth in the Russian economy is expected to be between 1.2 percent and 1.7 percent.
The Central Bank of Russia raised interest rates in September for the first time since December 2014 due to increased inflation risks.
While the bank is expected to continue its tight fiscal policy next year, the course of the U.S. sanctions policy is expected to affect the country's economy.
-Aftermath of agreement
Russian Energy Minister Alexander Novak said that they would gradually reduce their oil production in January in line with OPEC’s decision to cut oil production.
At the beginning of this month, the 5th OPEC meeting was held in Vienna, Austria. The cartel and some non-OPEC countries, including Russia, agreed to reduce oil production by 1.2 million barrels per day. Russia committed to reducing its production of 228 thousand barrels per day under this agreement.
Russian Economic Development Minister Maxim Oreshkin said the decision to cut oil output as per the OPEC agreement would stabilize the Russian economy, adding that, 'the agreement will increase investments in the Russian oil industry.'
-Putin's press conference
The main agenda item in Russia this week will be the traditional annual press conference of Russian President Vladimir Putin. Putin is expected to answer dozens of questions on all current issues within four hours.