Bank of Russia flags possible interest rate cut in July

Bank of Russia may cut its official interest rates again at the end of the month, perhaps even by as much as 50 basis points.

Speaking at the annual International Financial Congress in St.Petersburg, central bank Governor, Elvira Nabiullina, reportedly said another interest rate cut was on the table for its end-July meeting and that it would again consider a 50 bass point reduction, although it would prefer to keep to more incremental reductions of 25 basis points.

A reduction, regardless of the size, was not yet anticipated by economists.

In June, the monetary authority cut its key rate by 25 basis points to 7.50%.

In response to calls from some in Russia to tap the country's sovereign wealth fund to bolster economic growth, Nabiullina also argued against searching for "quick fixes", explaining that it would be a waste of time and compromise Russia's macroeconomic stability.

Her remarks came a day ahead of the release of consumer price data which was expected to reveal a slowdown in the year-on-year rate of consumer price gains from 5.1% in May to 4.8% for June.

According to Nabiullina, Russians were "struggling" because stability had failed to boost their quality of life, but while it was easy to blame external factors, those were certainly not the only reason.

The day before, in an interview with Reuters, the Governor said the monetary authority was planning to reduce interest rates in small steps, cognizant of the risks that increased government spending might to lead to an appreciation of the rouble.

As of 1533 BST, the US dollar was near its best levels of the session against the Russian rouble, adding 0.21% to 63.4288.