The Russian central bank has slashed its key interest rate amidst a decline in inflationary pressure and recovery of the ruble, the bank announced on Thursday.
The Bank of Russia’s board of directors has cut the key rate by 300 basis points to 11 percent per year, a May 26 press release said. The rate cut is effective from May 27, 2022. There has been a “significant slowdown” in the current price growth rates according to the latest weekly data.
Inflationary pressures are also easing due to the “ruble exchange rate dynamics” while inflation expectations among households and businesses are declining, the bank said.
In the aftermath of Russia’s invasion of Ukraine on Feb. 24, the Russian central bank had raised the key interest rate from 9.5 percent to 20 percent as the ruble tumbled against the dollar. On March 7, Ruble was trading at about 158 to the dollar, up from about 81 when the conflict in Ukraine began….