Europe

Central Bank of Russia lowers key rate as inflation eases

The Central Bank of Russia cut key interest rates on Friday as the country’s economy recovered faster than expected following sanctions imposed on Moscow for military operations in Ukraine.

“Inflation is slowing rapidly and economic activity is declining less,” the Central Bank of Russia said in April, cutting interest rates from 11% to 9.5%.

However, “the external environment of the Russian economy remains difficult and severely constrains economic activity,” he said.

The next price review meeting will be held on July 22nd.

The central bank had already cut key interest rates by 3 percentage points at an emergency meeting just two weeks ago.

Russia’s economy is facing a severe recession and consumer demand is weakening.

A few days after President Vladimir Putin sent troops to Ukraine and the West struck Moscow with corresponding sanctions, the central bank more than doubled its key interest rate to 20% to support the plunging ruble. I did.

Since then, the ruble has shown a remarkable backlash, rising about 30% against the dollar, and the central bank has tripled its key interest rates.

A strong ruble is not desirable for the Russian government, which fears it could hurt budgetary income and exports.

In general, low interest rates are unattractive to foreign investment and devalue the national currency.

https://www.themoscowtimes.com/2022/06/10/russian-central-bank-cuts-key-rate-as-inflation-eases-a77970 Central Bank of Russia lowers key rate as inflation eases

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