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Russia central bank chief hints at more rate cuts amid steady inflation trends

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Russia central bank chief hints at more rate cuts amid steady inflation trends

Central Bank of the Russian Federation Governor Elvira Nabiullina on Oct. 10 hinted at more interest rate cuts, saying a steady decline in inflation is paving the way for a faster pace of policy easing, Reuters reported.

In September, the central bank lowered its key interest rate for the third time in 2019, as it revised down its forecasts for GDP growth and inflation. The bank projected annual inflation to be in the range of 4.0% to 4.5% for this year, compared to a previously estimated range of 4.2% to 4.7%.

"We are seeing steady trends in inflation, which are allowing us to ease monetary policy faster than we previously thought," Nabiullina said, according to Reuters. However, she declined to comment on the extent of any potential rate cuts for the rest of the year.

Nabiullina said the bank would further lower its estimated inflation range before the end of 2019, with the finance ministry's planned expenditure serving as a "significant" factor in the projections, according to Reuters.

Nabiullina's "unusually" dovish statements suggest the central bank's higher level of confidence in the lack of "pro-inflationary factors" in the medium term, according to Dmitry Dolgin, ING chief economist for Russia. Dolgin said he expects rate cuts of 25 basis points each in October and December.