Bank of Russia lowers key rate by 3 percentage points to 14% per annum

However, the external environment for the Russian economy remains challenging, the regulator pointed out

The Bank of Russia lowered the key rate by 3 percentage points (pp) to 14% per annum, showing that it sees possibilities for its further reduction in 2022, Qazet.az  reports.

"On 29 April 2022, the Bank of Russia Board of Directors decided to cut the key rate by 300 basis points to 14.00% per annum. The external environment for the Russian economy remains challenging and significantly constrains economic activity. With price and financial stability risks no longer on the rise, conditions have allowed for the key rate reduction," the statement said.

According to the Bank of Russia, "Recent weekly data indicate a slowdown in current price growth rates on the back of a strengthening of the ruble and a cooling of consumer activity. Further inflation movements will be shaped by such impactful factors as the efficiency of import substitution processes and the scale and speed at which imports of finished goods, raw materials and components will be recovering. The Bank of Russia’s monetary policy will take into account the need for a structural transformation of the economy and will ensure a return of inflation to target in 2024."

The regulator noted if the situation develops in line with the baseline forecast, "the Bank of Russia sees room for key rate reduction in 2022".