Maxim Reshetnikov, the Russian Economy Minister, urged on Monday that central banks take into consideration slowing inflation when they meet next week to set interest rate. He warned that Russia's cooling economic is showing signs "hypothermia".

In order to combat the stubbornly rising inflation rate, Russia's Central Bank has maintained its key interest rates at 21%. This tight monetary policy has dampened investment, just as economic impacts of high military spending start to diminish.

In March, President Vladimir Putin urged his economic officers not to freeze the Russian Economy as if it was in a "cryotherapy room" with high borrowing rates. Many analysts interpreted this as an invitation to begin a cycle of easing.

Reshetnikov said, in a speech to the State Duma (Russia's lower chamber of parliament), that the inflation rate in recent weeks was in the range of 3-4% when calculated in annual terms.

Reshetnikov stated that "we expect May data to consolidate this trend, and we expect the central bank to take into consideration this when making decisions. We also see risks of hypothermia economics in the current regime."

Reshetnikov called the ministry's estimate of 7.6% annual inflation in 2025 "realistic".

A Russian Railways document, seen last week by, showed that major Russian exporters, including Rusal, and Gazpromneft, have reduced the volume of commodities such as metals and oil products, they send by train. This shows the impact of the subdued economy on the demand for these commodities.

The next meeting of the central bank to set rates is scheduled for 6 June. The next rate-setting meeting of the central bank is scheduled for June 6.

(source: Reuters)