Russian central bank slashes key interest rate again

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Russia’s central bank Friday said it was cutting its key interest rate for a second straight time as risks of price rises and financial instability were no longer rising.

The Bank of Russia said it was slashing the rate from 17 percent to 14 percent from May 4, a greater cut than predicted by many analysts.

It said this was because “price and financial stability risks [are] no longer on the rise.”

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The central bank cut the interest rate to 17 percent earlier this month following an emergency hike to 20 percent in late February, four days after the start of Moscow’s military action in Ukraine.

This came after Western nations imposed sanctions that largely cut Russia’s financial sector off from the global economy.

The ruble also plunged to historic lows against the dollar and the euro, from which it has since rebounded.

The central bank said Friday that “current growth rates of consumer prices have slowed significantly after they peaked in the first half of March.”

It said this was due to a “strengthening of the ruble and a cooling of consumer activity.”

The central bank reported 16.5 percent inflation year-on-year in March, a level not seen since 2015.

The central bank nevertheless forecast inflation could hit 23 percent this year before slowing in 2023.

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