At an unscheduled meeting of policymakers, Russia’s central bank cut its key rate sharply to 17% and said it maintained the prospect of further cuts in upcoming meetings.
Last month, the central bank kept its key rate at 20% following a massive emergency hike in February and announced it would start buying Federal Loan (OFZ) government bonds, warning impending spike in inflation and impending economic contraction.
On Friday, the central bank unexpectedly cut the key rate by 300 basis points, taking the decision ahead of its next regular meeting scheduled for April 19.
“Today’s decision reflects a shift in the balance of risks from accelerated consumer price growth, lower economic activity and financial stability risks,” the bank said. central bank, adding that it “leaves open the prospect of a further reduction in the key interest rate at its next meetings”. .”
The central bank added that annual inflation will continue to rise due to the base effect, but the latest weekly data showed a slowdown in the rate of price growth.
“The tightening of monetary conditions already in place is partly offset by the loan support programs launched by the government and the Bank of Russia, but it will continue to limit pro-inflationary risks,” the statement said.
