The importance of pursuing cautious monetary policy was emphasised in the Central Bank of Russia’s statements on the rate decision. Inflation has slowed in past months on e.g. weak domestic demand and recent ruble appreciation. In February, consumer prices were up 8 % y-o-y. The CBR still regards, however, inflation risks high and noted that moderately tight monetary policy could remain in place longer than previously planned. The CBR expects to reach its inflation target of 4 % in late 2017. Inflation risks include development of oil and other commodity prices, high inflation expectations caused by the ruble’s previous collapse and uncertainty related to fiscal policy. The CBR noted that this year’s planned budget deficit and its funding mostly out of the Reserve Fund can slightly ease monetary conditions. Loosening fiscal policy further could fuel inflation and decrease room for monetary easing.