Russian interest rate lower ever

RUSSIA / FSU POLITICS - In Brief 26 Jul 2020 by Alex Teddy
On July 24 the Central Bank of Russia (CBR) cut its key rate to 4.25%. The aim is to revivify the economy. This is the third interest cut in a row since April 2020. Coronavirus has been the major factor in prompting the widely expected move. The cut has been by 25 basis points which is less than some pundits forecast. CBR indicated that further cuts are probable.The next CBR meeting is in September. Many analysts say that the key rate will be down to 4% by the end of 2020.Inflation is 3.2%. CBR's target is 4%. The interest rate cut probably won't bring inflation up. CBR's statement in the rate cut cited inflation as a major concern. The economic recovery is slow and unsteady. A second wave of coronavirus has already prompted more lockdowns in other countries. This will have an impact on hydrocarbon prices which are the mainstay of the Russian economy. CBR said that Russian GDP is going to fall around 5% in 2020 and rise by about 4% in 2021. The latter prediction is rather optimistic.

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