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Russian central bank in Moscow: further interest rate cuts in prospect
Photo: Sergei Bobylev / ITAR-TASS / IMAGO
In view of Western sanctions and an impending recession, Russia's central bank has surprisingly lowered its key interest rate sharply.
She reduced it by a full three percentage points to 14 percent.
Experts had only expected a reduction of two points.
The monetary authorities in Moscow also signaled their willingness to make further interest rate cuts in the course of the year.
Experts expect that interest rates could be 10.5 percent at the end of the year.
As a result, the ruble rose against the euro to its highest level in more than two years.
The stabilization of the local currency should help to mitigate the risk of inflation a little.
The rate of inflation in Russia was 17.6 percent most recently.
The central bank expects it to reach up to 23 percent this year.
She is aiming for a value of four percent.
In order to prevent the ruble from falling, the central bank initially raised the interest rate from 9.5 to 20.0 percent after the Russian invasion of Ukraine, and then lowered it to 17 percent in a first step.
According to the ministry responsible, Russian economic growth slowed to 1.6 percent in March from 4.3 percent in February.
In the first quarter, economic output increased by 3.7 percent year-on-year.
According to government documents, the Russian economy could shrink by up to 12.4 percent this year at worst.
An indication that the sanctions imposed by the West because of the war in Ukraine are having an effect.
hey/Reuters
