According to analysts’ predictions, Russia’s central bank reduced its benchmark interest rate by 50 basis points to 7.5 per cent on Friday while warning of persistent economic dangers from Western sanctions despite a reduction in inflationary pressures.
This year’s reduction in borrowing rates is the sixth in a row. The primary rate was previously raised by the central bank from 9.5 per cent to 20 per cent earlier in 2022 to provide additional support for the ruble’s declining value following the war in Ukraine.
The goal of the central bank’s rate cuts is to reduce borrowing costs, slow the ruble’s collapse, and lessen the economic impact of the sanctions imposed on Russia in reaction to the conflict. As of 11:08 GMT, the USD/RUB was trading at 60.00 versus the dollar (07:08 EST).
The central bank claimed in a statement that its most recent rate decision was motivated by weak consumer demand and other “one-off events,” which caused a decrease in annual inflation. But it cautioned that expense anticipations for both individuals and corporations are still “elevated.”