Bank of Russia cuts interest rates

RUSSIA / FSU POLITICS - In Brief 27 Oct 2019 by Alex Teddy
On October 25 the Bank of Russia cut the interest rate to 6.5%. The atmosphere of low inflation, poor domestic growth and the distinct possibility of a worldwide economic slowdown all contributed to the decision. The previous interest rate was 7%. The bank also cited the government's tardiness is spending USD 400 billion on national projects. This has contributed to weak demand.The central bank stated that additional cuts might have to come if inflation does not rise. Inflation is estimated to reach between 3.2% and 3.7% by the end of 2019. The bank's target inflation is 4% but the actual figure is moving away from that.The next Board of Directors meeting at the Bank of Russia is December 13. Do not be surprised if the rate is cut again to 6.25% or even 6%.The central bank's decision appeared to have almost no effect on the value of the RUR.

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