Russia slashes rates of interest as ruble rebound supplies some aid

Russia slashes interest rates as ruble rebound provides some relief

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At an extraordinary meeting, the Russian central bank cut interest rates to 11% from 14% and said further reductions could follow. Rates were hiked as high as 20% in the immediate aftermath of Russia’s invasion of Ukraine in February as the bank tried to prevent Western sanctions triggering a financial crisis.

“Inflationary pressure eases on the back of the ruble exchange rate dynamics as well as the noticeable decline in inflation expectations of households and businesses,” the Russian central bank said in a statement. It said it expected inflation to fall to between 5% and 7% this year, down from around 17.5% this month.

The ruble crashed to a record low of about 135 to the US dollar in the wake of the invasion as the West froze about half of Russia’s $600 billion foreign currency reserves. Hundreds of multinationals have quit the country, and Russia has been banned from buying key Western technology and services.
But Russia’s currency has since rebounded and is the world’s best…

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