By Emre G├╝rkan Abay
Russia letter, week beginning Oct. 31

- OPEC meeting

Russian markets were focused on last week’s meeting between OPEC and non-OPEC countries in Vienna.

However, no deal to freeze oil production levels was agreed and as a result oil prices once again dipped below the $50 per barrel level, which is bad news for Russia, one of the largest oil producers in the world.

Meanwhile, experts concur that even if an agreement was reached between OPEC and Russia, there would be doubts as to whether the parties would comply with their obligations.


- Russian Central Bank keeps key interest rate unchanged

In a decision last week, Russia’s Central Bank decided to hold the country’s key interest rate at 10 percent, in line with expectations.

The bank will assess inflation risks and the compliance of economic performance and inflation with the baseline scenario, when it makes its key rate decision in the upcoming months, according to its statement, adding that it might cut rates in the first or second quarter of next year.

 According to the bank, consumer inflation in Russia has slowed to 6.2 percent as of late October, down from 6.4 percent a month earlier, with the decline put down to the strength of the national currency with higher-than-expected oil prices.

Following a moderately tight monetary policy, the regulator expects annual growth in consumer prices to be less than 4.5 percent by next October with a drop in target of 4 percent by the end of 2017.

31 Oct,2016