The Russian central bank slashed its key interest rate by 300 basis points to 17% on Friday, indicating that additional easing is on the way.
“Today’s decision reflects a shift in the risk balance between faster consumer price growth, economic activity reduction, and financial stability threats,” the Bank of Russia stated in a statement.
The bank would consider external and internal threats, financial market reactions, and inflation trends in making future decisions, according to the statement.
Future cuts, according to the central bank, are possible.
“At its upcoming meetings, the Bank of Russia…. keeps the possibility of additional key rate decrease open,” it stated.
Annual consumer inflation in the country surged to 16.70 percent in the first week of April, the highest level in the last seven years.
After a huge increase from 9.5 percent in February because to sanctions imposed as a result of Russia’s war in Ukraine, the bank retained the rate at 20 percent in March.
The Bank of Russia’s Board of Directors will convene on April 29 to discuss the next rate hike. At 1.30 p.m. Moscow time, the press release on the Bank of Russia Board decision and the medium-term forecast will be released (1030GMT).