Russia’s Central Bank on Friday lowered its key rate by a quarter of a percentage point to 7.25 percent, and signalled further cuts as inflation slows and growth flatlines.
“Inflation slowdown is continuing,” the regulator said in a statement. “Weak economic activity, along with temporary factors, limits inflation risks
over the short-term horizon.”
It said there is a “possibility of further key rate reduction” at its next meeting if inflation returns to the forecast 4 percent in early 2020.
The annual inflation rate decreased to 4.6 percent in July due to “consumer demand trends” and a strengthened ruble, it said.
Russian economic growth slowed dramatically in the first quarter of 2019 to an annual rate 0.5 percent, falling below the Central Bank’s forecast.
The central bank last cut its key rate by 0.25 percentage point in June, citing similar reasons.