İrem UZUN -TDO- Russia Central Bank of Russia has cut interest rates for the sixth time in a row as it continues to respond to slower-than-expected inflation. Russia’s key rate will fall to 6% on Monday from its current level of 6.25%, the Bank said Friday. The latest decision, taken at a meeting of the Bank’s governing board in Moscow, means rates have been cut on each of its last six meetings. The Bank said it remained open to further cuts in future months in order to counter weak inflation, which came in at 2.4% in January - well below the Bank’s 4% target.
The cut was in line with a consensus forecast, surprising those who expected the central bank leave rates unchanged amid increased global market volatility and risks of higher state spending under a new Russian government.“If the situation develops in line with the baseline forecast, the Bank of Russia holds open the prospect of further key rate reduction at its upcoming meetings,” the central bank said in a statement. “The central bank said it cut the key rate because “inflation slowdown is overshooting the forecast. In its key rate decision-making, the Bank of Russia will take into account actual and expected inflation dynamics relative to the target and economic developments over the forecast horizon, as well as risks posed by domestic and external conditions and the reaction of financial markets,” it told.
The central bank said economic growth in Russia is on track to accelerate to a range of 1.5 percent to 2 percent in 2020 and then to 3 percent in 2022, having reached 1.3 percent in 2019.The next rate-setting meeting is scheduled for March 20.