2025-10-24 12:53

MOSCOW, Oct 24 (Reuters) - Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin addressed a news conference on Friday after the central bank cut its interest rate by 50 basis points to 16.5%. Nabiullina and Zabotkin spoke in Russian. The quotes below were translated into English by Reuters. Sign up here. NABIULLINA ON THE OPTIONS FOR FRIDAY'S RATE DECISION "Three options were considered in detail: 16%, 16.5%, and an unchanged rate of 17%. "There were many arguments for these choices, but the differences in positions can probably be reduced to the assessment of stable inflation and the degree of concern about the scale of possible secondary effects from one-off pro-inflationary factors." NABIULLINA ON THE IMPACT OF WESTERN SANCTIONS "The sanctions are primarily aimed at restricting exports of our raw materials. It's difficult to predict the exact impact of these sanctions, but we view them as a negative external factor. "Much will depend on how we adapt to these sanctions. We know from previous periods that it takes a certain amount of time, but adaptation did happen. Therefore, it isn't necessary yet to assess whether this will require any changes in monetary policy decisions. We will see how the situation develops." NABIULLINA ON FUTURE RATE DECISIONS "I believe that we are in a cycle of monetary policy easing, either way. It may happen with pauses, but you can see the trajectory of the rate that we have set for next year, which is a continuation, albeit a more cautious one, of monetary policy easing... We see that demand growth is slowing down, demand overheating is subsiding, and we expect the demand gap to close in the first half of next year. "Our forecast, if you look at the trajectory of the key rate, including for this year, suggests the possibility of both an additional reduction at the December (rate-setting) meeting and an unchanged rate." NABIULLINA ON THE LABOUR MARKET "...tensions on the labour market are also easing slightly... We see that the number of vacancies is decreasing. The (labour market) survey shows that the share of companies experiencing a shortage of personnel is also decreasing. Although the number of these companies remains high, there is a certain trend towards a reduction in tension in the labour market." NABIULLINA ON THE IMPACT OF OIL PRICES ON MONETARY POLICY "The budget rule essentially neutralises the impact of these oil price fluctuations on our economy. It absorbs, if not all, then the lion's share of this volatility...(the mechanism) works as long as there are sufficient funds in the National Welfare Fund to neutralise this impact, to compensate for the loss of oil and gas revenues...And if the funds are exhausted, then the effectiveness of the budget rule as insurance against a temporary decline in prices will also be exhausted. "Therefore, in this regard, we welcome the government's plan to gradually reduce the cut-off price, as this will help to protect the economy in the long term, to protect the economy and the budget more reliably from oil price fluctuations and from scenarios in which the long-term export price of oil may fall below $60 per barrel." NABIULLINA AND ZABOTKIN ON HOW INFLATION EXPECTATIONS COULD DECREASE Nabiullina: "People's expectations that inflation will be high will decline only if they see that prices in stores are not constantly rising. If they continue to rise, no matter what we say, people will have high inflation expectations. Therefore, it is essential for us to continue reducing inflation. Lowering and stabilising inflation and inflation expectations at low levels will allow us to reduce the key rate more quickly." Zabotkin: "If inflation expectations are low and anchored, the Central Bank needs to react less with interest rates to short-term fluctuations in inflation in order to keep inflation low in the future. The more anchored inflation expectations are, the less monetary policy needs to react to demand shocks." *NABIULLINA AND ZABOTKIN ON GEOPOLITICS' IMPACT ON ROUBLE EXCHANGE RATE Nabiullina: "We must admit that our exchange rate has become more volatile. Depending on the combination of these factors, it can react to them in completely different ways. The exchange rate fluctuates within a relatively stable range. In fact, we should not look at these short-term fluctuations, but rather at longer periods. "I would like to point out that, in addition to exports, imports, capital flows, and our monetary policy, structural factors are now influencing the exchange rate...Internal factors include import substitution, protectionism, localisation requirements, and requirements to purchase domestic products within the public sector and for government orders. These factors will objectively restrict imports and, all other things being equal, will objectively lead to a smaller share of imports in GDP. It should be understood that this will result in a stronger exchange rate. "The second long-term factor is a decline in demand among our citizens for foreign assets - currency, foreign securities, industrial assets in 'unfriendly countries' - due to sanctions risks and restrictions. And third, an increase in the budget cut-off price. In essence, this means more active use of oil and gas rents. This also leads to a structurally stronger real exchange rate. " Zabotkin: "Here I will repeat once again what we constantly remind ourselves of: if our monetary policy is aimed at low inflation, it automatically protects the purchasing power of the national currency not only in relation to goods and services, but also in relation to other foreign currencies, except for severe external shocks, which, of course, can lead to changes. But overall, exchange rate stability is a consequence of a policy aimed at low inflation -- and only that." https://www.reuters.com/business/finance/russias-nabiullina-future-rate-decisions-2025-10-24/

2025-10-24 12:39

Oct 24 (Reuters) - U.S. stock index futures extended gains on Friday after consumer prices for September came in cooler-than-expected. A Labor Department report showed that the Consumer Price Index rose 0.3% on a monthly basis in September versus a 0.4% increase forecast by economists polled by Reuters. It stood at 3% on a year-on-year basis, compared with an estimated 3.1% rise. Sign up here. The core figure, excluding volatile food and energy components, rose 0.2% on a monthly basis, compared with expectations for a 0.3% advance. It came in at 3% on a year-on-year basis, versus an estimated 3.1% increase. At 08:31 a.m., Dow E-minis were up 235 points, or 0.5%, Nasdaq 100 E-minis were up 246.5 points, or 0.98, and S&P 500 E-minis were up 47 points, or 0.7%. https://www.reuters.com/business/snapshot-wall-st-futures-extend-gains-after-september-inflation-data-2025-10-24/

2025-10-24 12:26

Cuts interest rate by 50 basis points to 16.5% Governor says the central bank still in easing cycle Raises average rate forecast for 2026 to 13%-15% Raises inflation forecast for 2026 to 4%-5% MOSCOW, Oct 24 (Reuters) - The Russian central bank cut its interest rate by 50 basis points to 16.5% at a board meeting on Friday, its first since the government proposed raising VAT in 2026 and U.S. President Donald Trump imposed sanctions on Russian oil companies. The decision was in line with economists' median forecast in a Reuters poll. Sign up here. However, the central bank also raised its 2026 inflation forecast to between 4% and 5% from 4% previously, partly due to the tax hike, and increased its average interest rate estimate for 2026 to between 13% and 15% from between 12% and 13% before. "This is a much more negative development than the symbolic 0.5 percentage point rate cut is positive," said economist Evgeny Kogan. The rouble rose by 0.7% against the U.S. dollar after the board meeting. ONE-OFF FACTORS BLAMED FOR RECENT INFLATION RISE "The current inflationary pressures will temporarily increase in late 2025 and early 2026 because of a number of factors, including price adjustments and the reaction of inflation expectations to the upcoming VAT rise," the central bank said in a statement. Governor Elvira Nabiullina said that the central bank was still in the monetary policy softening cycle but will proceed in a more cautious way, pointing to easing tightness in the labour market and slowing demand as factors behind the cut. "We see that demand growth is slowing down, demand overheating is subsiding, and we expect the demand gap to close in the first half of next year," Nabiullina told a news conference. Russian businesses, which piled pressure on the central bank to cut its key rate faster, say they need interest rates at around 12% to 14% for investment and economic growth to resume. The bank also adjusted its 2025 inflation forecast to between 6.5% and 7% from between 6% and 7% before. Russia's weekly inflation, an important gauge for the bank, has been above 0.2% for the past three weeks. Cumulative inflation since the start of the year had reached almost 5% by October 20. On an annual basis, it rose to 8.14% in the latest week. Prices for gasoline, which the central bank called a "marker" commodity important for people's inflationary expectations, have risen by 11.6% since the start of the year due to recent Ukrainian attacks on Russian refineries. "The current price growth acceleration was substantially affected by one-off factors. They include increased motor fuel prices and a faster-than-usual rise in fruit and vegetable prices in the autumn months," the central bank said. The latest data on households' inflation expectations showed that people see inflation at 12.6% in one year's time. SIGNIFICANT UNCERTAINTY FACTOR Trump on Wednesday imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting oil companies Lukoil and Rosneft, which account for half of Russia's oil production. The measure comes as Russian economic growth is set to slow sharply to about 1% in 2025 from 4.3% last year, high interest rates are hindering investment, and the government has had to hike taxes to balance next year's budget. "Geopolitical tensions remain a significant uncertainty factor," the central bank said. It cut its forecast for Russia's exports to a fall of up to 3% in 2025 from a fall of up to 1% before. President Vladimir Putin conceded on Thursday that the new U.S. sanctions were of a "serious nature" and would lead to "certain losses", but that they would not have a significant impact on Russia's economic wellbeing. The central bank cut its key interest rate by 100 basis points to 17% at its last board meeting on September 12 - less than analysts had expected - citing stubbornly high inflation. Since then, the finance ministry has proposed raising the value-added tax rate to 22% from 20% in 2026 to help curb the budget deficit, a move seen as adding up to one percentage point to inflation in 2026. https://www.reuters.com/business/finance/russian-central-bank-cuts-key-rate-by-50-bps-after-new-us-oil-sanctions-2025-10-24/

2025-10-24 12:25

BRASILIA, Oct 24 (Reuters) - Brazil's current account deficit reached $9.77 billion in September, wider than the $7.75 billion shortfall forecast by economists in a Reuters poll, central bank figures released on Friday showed. Foreign direct investment (FDI) for the month came in at $10.67 billion, beating the $6.5 billion expected in the poll and marking the highest level for the month in the historical series. Sign up here. Over the past 12 months, FDI amounted to 3.47% of gross domestic product (GDP), not enough to cover the current account deficit, which stood at 3.61% of GDP. Brazil's widening external gap has been driven mainly by a shrinking trade surplus: imports have been growing faster than exports as Latin America's largest economy continues to show resilience despite high borrowing costs. In September, the trade surplus narrowed by $2.2 billion from the same month a year earlier, said the central bank. Also contributing to the larger current account deficit, the deficit in factor payments rose by $946 million, only partially offset by a $640 million decline in the services deficit. According to the central bank, portfolio investments in the domestic market posted net inflows of $4.43 billion in September, a 49.6% increase from a year earlier, driven by $5 billion in net debt inflows and $572 million in net equity outflows. https://www.reuters.com/world/americas/brazil-posts-wider-than-expected-current-account-deficit-september-2025-10-24/

2025-10-24 12:15

SOFIA, Oct 24 (Reuters) - Bulgaria is preparing measures to secure uninterrupted supplies of oil and oil derivatives after the U.S. imposed sanctions on Russia's Lukoil (LKOH.MM) , opens new tab, which runs the country's biggest oil refinery, Energy Minister Zhecho Stankov said on Friday. U.S. President Donald Trump imposed sanctions on Russia's two biggest oil companies, Lukoil and Rosneft (ROSN.MM) , opens new tab, over Moscow's war in Ukraine, sending shockwaves across Europe, where Lukoil has a network of filling stations, and transports, stores and refines crude. Sign up here. Lukoil is Bulgaria's biggest crude importer. It runs the 190,000 barrel-per-day Burgas oil refinery, operates more than 200 petrol stations and has a fuel transport and depot network. "This is an extremely important situation in which we, with the interested parties, including our European partners ... will have the opportunity ... to build a common European action plan for the situation that has arisen," Stankov said after a ministerial meeting including other state agencies. He said that Bulgaria's plan will involve monitoring fuel stocks in the country. "Bulgarian citizens should be calm, fuel is provided. Until the end of the year, the quantities are guaranteed," Stankov said at a news conference. Justice Minister Georgi Georgiev said the Burgas oil refinery and several other subsidiaries representing the Lukoil group meet the criteria of the U.S. sanctions and that the government was in contact with U.S. institutions to ensure the refinery can continue operating. The Bulgarian parliament on Friday adopted an amendment requiring the cabinet and the country's intelligence service to provide their approval prior to any sale of Lukoil's assets in Bulgaria. Lukoil was already under pressure to due to existing sanctions against Russia over the Ukraine conflict. Georgiev said the security services and the interior ministry have taken additional measures to ensure capacity, manpower and any other security measures at the refinery. https://www.reuters.com/business/energy/bulgaria-prepares-measures-its-lukoil-owned-refinery-after-us-sanctions-2025-10-24/

2025-10-24 12:15

BEIJING, Oct 24 (Reuters) - China on Friday unveiled a proposal for a more stringent steel capacity swap plan, 14 months after it paused the old programme that failed to rein in rampant expansion, leaving the industry with overcapacity that hit profitability and sparked protectionist backlash. China halted its existing steel capacity replacement programme from August 23, 2024. Sign up here. The addition of new steel capacity in the key areas, the transfer of steel capacity from non-key areas to key areas and the capacity transfer among key areas are strictly forbidden, China's Ministry of Industry and Information Technology said in a statement. Key areas refer to the Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta region, and the Fenwei Plain, according to the statement. Provinces and cities that the country has clear targets for total steel capacity are not allowed to accept the transfer of capacity from other regions, it said. At least 1.5 metric tons of old steel capacity is needed to exit for building every-tonnage new capacity. More efficient utilization of scrap steel to develop the cleaner electric-arc-furnace-based steelmaking in an organized way and the development of hydrogen metallurgy in appropriate regions are encouraged, it added. https://www.reuters.com/world/asia-pacific/china-proposes-more-stringent-steel-capacity-swap-plan-curb-overcapacity-2025-10-24/