Russian Central Bank Interest Rate Cut as Expected

July 24, 2020

With a warning that “in the context of prevailing disinflationary factors, there is a risk that in 2021 inflation might deviate downwards from the 4% target,” officials at the Central Bank of the Russian Federation enacted their fourth one-week repo rate cut of 2020 to 4.25%. Together with reductions of 25 basis points in February, 50 bps in April, 100 bps in June, today’s action brings to two full percentage points the total drop so far this year. Although only 25 basis points in magnitude, a released statement indicated that further down-moves could become necessary. The baseline forecast for Russian growth foresees only a gradual economic recovery. Russian lately has experienced one of the world’s nastiest infestations of Covid-19.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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