Russian central bank lowers key rate to 7.5%, signals more cuts

Russian central bank lowers key rate to 7.5%, signals more cuts

The Russian central bank cut its key interest rate for the first time this year in line with market expectations, paving the way for further monetary easing to tackle slowing economic activity, Reuters reports.

The bank, acting on a slowdown in inflation, cut the key rate to 7.50% from 7.75%, the level it was at before the previous rate increase in December.

“(The) annual inflation slowdown is continuing... Economic growth in the first half of 2019 is lower than the Bank of Russia’s expectations,” the central bank said in a statement, explaining the move.

The central bank said more rate cuts were likely in the next few months.

“If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of further key rate reduction at one of the upcoming Board of Directors’ meetings and a transition to neutral monetary policy until mid-2020.”

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