Central Bank lowers Russian interest rates in bid to stimulate economy

CBR chief Elvira Nabiullina

CBR chief Elvira Nabiullina

The Central Bank in Moscow today cut Russian interest rates for the fourth month in a row as it tries to stimulate the country’s ailing economy. The rate now stands at 11.5%, down from a peak of 17% last December. The Bank made the decision “taking account of lower inflation risks and persistent risks of considerable economy cooling.” Although inflation is still running at 15.8%, the rouble has enjoyed something of a rally recently, and has strengthend from 70 to 55 against the dollar since February. 
Low oil prices and Western sanctions have taken their toll on the Russian economy, however, prompting the Bank’s CEO Elvira Nabiullina to cut rates further in an attempt to stimulate borrowing and spending among consumers and businesses. “The Bank of Russia will be ready to continue cutting the key rate as consumer price growth declines further in compliance with the forecast, but the potential of monetary policy easing will be limited by inflation risks in the next few months,” the bank said in a statement.

Source: cnbc