Economic surprise: Russian Central Bank cuts prime rate, expects better economic growth
March 25, 2017 – Fort Russ News –
– German Economic News, translated from German by Tom Winter –
|Chief of Russian Central Bank Elvira Nabiulina|
Russian central bank surprisingly cuts interest rates
The Russian Central Bank has surprisingly cut its benchmark interest rate, and further cuts are in prospect.
The key rate will be reduced from 10.0 to 9.75 percent, the Russian Central Bank decided Friday in Moscow. This is the lowest level since 2014.
Most economists surveyed by Reuters did not expect any change. The Central Bank justified its action on grounds of low inflation and economic recovery, and considered a further easing of its monetary policy in the second and third quarters.
The rate of inflation currently stands at 4.3 percent. It is thus no longer far from the Central Bank target of four percent.
Russia’s economic prospects have also brightened. The Central Bank is expecting an economic growth of 1.0 to 1.5 percent this year, after lately expecting the possibility of seeing less than one percent. This despite the Russian economy facing the western sanctions in the Ukraine conflict and the recent low prices for oil, which have lately risen slightly.