Bank of Russia Lowers Rates Again, Cites Inflation Decline

The Bank of Russia’s Board of Directors cut its discount rate to 11% from 14% at its meeting today. The Bank had raised the key rate from 8% to 20% on Feb. 28 in reaction to the monster sanctions imposed by NATO countries to “crush” the Russian economy. It has lowered it in three steps during March, April, and May. The May 26 press release of the Bank said that its latest data show inflationary pressure easing slightly “on the back of ruble exchange rate dynamics as well as the noticeable decline in inflation expectations of households and businesses.” In April, annual inflation reached 17.8%, it said, and it was 17.5% as of May 20. The Bank’s press service also quoted the Directors’ report that “funds continue to flow into fixed-term ruble deposits while lending activity remains weak. This limits pro-inflationary risks and makes it necessary to ease monetary conditions.”