REFILE-UPDATE 2-Russian cenbank says will consider rate cut "thoughtfully and with care"

(Fixes typo in the 1st para)

* Russian cenbank to meet on rates on Sept. 18

* Cbank says should be careful with using room for cut

* Cbank to start publishing key rate trajectory

* Cbank updates economic scenarios

MOSCOW, Sept 10 (Reuters) - The Russian central bank will consider a rate cut next week “thoughtfully and with care” as the coronavirus pandemic makes such a decision more complicated, Deputy Central Bank Governor Alexei Zabotkin said on Thursday.

The central bank slashed the key rate to a record low of 4.25% this year to support an economy battered by a drop in prices for oil, Russia’s key export, and lockdowns related to the new coronavirus outbreak.

“The board of directors will consider the necessity of further rate cuts,” Zabotkin said of Sept. 18 rate setting-meeting, reiterating the central bank’s earlier line.

The COVID-19, however, adds “noise” to the data that the central bank takes into account, including on the economy and inflation, he said.

Zabotkin declined to assess the possibility of the rate cut but said the board will factor in increased market volatility.

A Reuters poll in late August showed Russia was expected to cut rates again this year as it deals with a full-scale economic crisis but an increasing number of analysts have said recently the central bank is likely to hold rates this month given a fall in the rouble.

Zabotkin played down the importance of the rouble’s plunge to its weakest since 2016 against the euro, saying that this weakening will not have a special economic impact.


The central bank plans to start publishing the trajectory of its key interest rate as part of its macroeconomic forecasts later this year or in 2021 to make its monetary policy more transparent, a development much awaited by the market.

Zabotkin said the central bank could cut its key interest rate below 4% if that is needed to boost consumer inflation back to its 4% target. Russia’s annual inflation stood at 3.6% in August.

The central bank also published a report on its monetary policy, expanding the number of scenarios that it takes into account.

The level of uncertainty now is higher than usual, which prompts the central bank to pursue a policy prone to various forecasts, Central Bank First Deputy Governor Kseniya Yudayeva said on Thursday.

The central bank pegged new scenarios to Russia’s and the global economic performance but not to oil prices, as was the case before.

In its base scenario, monetary policy will remain accommodative in 2021 and the key rate will return to the neutral policy with in the 5-6% range in the second half of 2020-23 forecast period when inflation stabilises at 4%.

The scenario does not envisages new anti-Russian sanctions.

In its risk, or worst-case, scenario for 2021, the bank sees inflation accelerating to 5.5-6.5% and gross domestic product growth close to zero, accompanied by risks of more sanctions and drop in crude prices to $25 per barrel. (Reporting by Andrey Ostroukh and Elena Fabrichnaya Editing by Steve Orlofsky and Toby Chopra)