Russia’s central bank lowered its key interest rate for a fifth time since early April, and said further cuts are possible if the inflation rate continues to ease.
The Bank of Russia on Friday lowered its key interest rate to 8% from 9.5%. The series of rate cuts has more than reversed a doubling of the key rate in the immediate aftermath of Russia’s invasion of Ukraine. The central bank said further reductions are possible.
“The Bank of Russia will consider the necessity of key rate reduction in the second half of 2022,” it said in a statement.
The initial hike to 20% from 9.5% in late February was intended to support a rapidly weakening ruble and limit a surge in inflation as imports became more expensive. But the ruble
has since regained lost ground and made some gains as Russia’s foreign-currency revenues from exports of oil and gas have surged, thanks to higher prices, while its imports have fallen sharply.
The central bank said that in addition to the ruble’s rebound, subdued consumer demand is now helping to ease inflationary pressures.
Write to Paul Hannon at [email protected]
Corrections & Amplifications
This article was corrected at 1047 GMT because the original misstated the day the key interest rate was lowered. The Bank of Russia lowered the key interest rate on Friday, not Thursday.