Agencies-Gaza post
Russia cuts interest rates key… details
The central bank of Russia cut interest rates by three foundation points from 14% to 11% on Thursday as inflation in the country showed signals of delay, according to the regulator.
The move is part of the easing of capital controls measures decided in March to protect the economy from an onslaught of Western sanctions.
According to the controller “The latest weekly data points to a significant slowdown in current price growth rates.”
“Inflationary pressures are fading on the back of ruble exchange rate dynamics as well as a noticeable drop in household and corporate inflation expectations,” it says in the press release.
The regulator notes that annual inflation hit 17.8% last month but slowed to 17.5% as of May 20 estimates. “Decreasing faster than Bank of Russia’s April forecast.”
According to the Bank of Russia forecast, annual inflation will fall to 5-7% in 2023 and will return to 4% in 2024.
The regulator also hinted that it could cut interest rates further in the coming weeks, noting that doing so poses risks to Russia’s financial stability “Reduced somewhat, allowing some capital control measures to be eased.” However, she stressed that the underlying conditions for the economy remain challenging.
Russia was forced to introduce capital control measures and hike interest rates to 20% in March after the US and its allies imposed an unprecedented series of sanctions in response to Moscow’s military operation in Ukraine. The sanctions triggered inflationary growth in the country and caused the ruble exchange rate to fall to record lows. However, measures to protect the economy have reversed these trends and the national currency rose to multi-year highs this month.
Source: RT
