Central Bank of Russia Cuts Key Interest Rate for Fourth Time in 2015

June 15, 2015

Following reductions of 200 basis points (bps) in January, 100 bps in March and 150 bis at the end of April, Russia’s main central bank rate was reduced today by 100 bps to 11.5%.  This cumulative 550-bp decline reverses by more than half a combined 900-bp rate hike last November-December, and more monetary relief is probably coming, according to a statement released today explaining the latest cut.  Bank of Russia officials believe that CPI inflation peaked this past March and project that such continues to subside because of weak demand and an upward turn in the ruble.  “The Bank of Russia will be ready to continue cutting the key rate as inflation risks abate and inflation 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 next policy meeting is slated for July 31.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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