The Central Bank of Russia announced on the 25th (local time) that it will lower its key interest rate by 2 percentage points, from 20% to 18% per year.
In a statement released on this day, the Central Bank of Russia explained that it made this decision because inflationary pressures are decreasing faster than expected, and domestic economic growth is slowing down. With this move, the Central Bank of Russia has cut its key interest rate for two consecutive months, following a reduction last month.
Russia's key interest rate had previously been raised to 21% per year in October last year, as inflationary pressures intensified due to the prolonged war in Ukraine. After that, the rate was kept unchanged for four consecutive times. However, as high key interest rates pushed lending rates even higher, many companies have been expressing difficulties in management. This led to widespread expectations that the Central Bank of Russia would further lower its key interest rate.
The Central Bank of Russia stated that it will maintain its tight monetary policy in order to bring next year's inflation rate back to the target level of 4%. Last month, Russia's annual inflation rate was in the 9% range, more than double the target rate.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
