Russian Central Bank Cuts Key Interest Rate from 20% to 17%

The next board meeting is scheduled for the 29th

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] The Central Bank of Russia lowered its key interest rate from 20% per annum to 17% on the 8th (local time).

According to TASS and other sources, the central bank held a board meeting to decide the key interest rate on the day and announced, "Starting from the 11th, the key interest rate will be lowered to 17% per annum."

The central bank explained the reason for the rate cut as a significant slowdown in the pace of consumer price increases due to the depreciation (value appreciation) of the local currency, the ruble exchange rate. It added, "Today's decision to lower the key interest rate reflects a shift in the balance between the risk of rising consumer prices and the slowdown in economic activity."

The ruble exchange rate, which had surged to 120 rubles against the dollar in early last month, is currently fluctuating around 75 rubles. The central bank assessed, "External conditions for the Russian economy remain difficult and continue to restrict economic activity, and financial stability risks persist, but the trend of further deterioration has stopped."

It continued, "We will make additional decisions regarding the key interest rate by comprehensively evaluating the domestic and international environment, financial market reactions to it, actual inflation and expected inflation trends, and economic growth," and stated, "We do not rule out the possibility of further key interest rate cuts at future board meetings." The next board meeting to decide the key interest rate is scheduled for the 29th.

Earlier, on February 28, amid economic turmoil caused by Russia's military operation in Ukraine and the West's ultra-strong sanctions against Russia, the central bank raised the key interest rate from the previous 9.5% to 20%. Currently, Russia is suppressing the ruble exchange rate and inflation surge through control measures such as restrictions on foreign currency remittances, mandatory conversion of 80% of foreign currency earnings by export companies into rubles, and mandatory ruble settlement for natural gas export payments.

This content was produced with the assistance of AI translation services.