Bank of Russia Eases Again

December 13, 2019

The Central Bank of the Russian Federation reduced its key interest rate by a further 25 basis points to 6.25%, bringing the accrued decline since July to 150 basis points. Moreover, a released statement provides forward guidance that officials during the first half of 2020 will ease further if conditions continue to warrant such. Inflation has fallen faster than policymakers were anticipating in part because the ruble has appreciated. Economic growth now looks likely to be close to the upper end of a previous projected 0.8-1.3% range. CPI inflation should slip under 3.0% early next year but to be between 3.5% and 4% at the end of the year.

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