Russia lowers interest rates – VnExpress Business

The decision was made by the Central Bank of Russia (CBR) before the next regular meeting on April 19. The surprise move came after comments by Finance Minister Anton Siluanov that the agency was working with the central bank on measures to make the ruble rate more predictable and less volatile. more active.

“Today’s decision reflects a shift in the balance of risks stemming from factors such as rapidly rising consumer prices, a decline in economic activity and risks to financial stability,” CBR said in a statement.

The ruble did not react much to this decision to lower interest rates. At 915 GMT, the Russian currency fell 0.1% to 75.8 rubles to the dollar, quite a bit short of its steepest drop since February 11 of 74.26 rubles to the dollar.

The ruble’s volatility remains volatile and trading volumes on the Moscow Exchange are below average. However, it has fully recovered to pre-conflict Ukraine levels.

The ruble has recently recovered from the forced conversion of revenue in dollars and euros by exporting companies, while demand for foreign exchange has been constrained by capital controls imposed by Russia when the ruble record devaluation in March.

The CBR also announced the possibility of further rate cuts in the upcoming meetings. LockoInvest said it has adjusted its year-end Russian interest rate forecast to 11-12%, from no more than 15% previously.

Last month, the Central Bank of Russia kept its key interest rate at 20% after a big hike in February. It will also start buying OFZ government bonds, warning of rising inflation and an economic downturn. economic.

Accordingly, the CBR forecasts annual inflation will continue to increase due to fundamentals, but the latest weekly data shows that inflation growth has slowed.

“The monetary tightening is partially offset by loan support programs launched by the government and the Central Bank of Russia, but it will continue to limit inflation risks,” the CRB statement said.

Session An (according to Reuters)