Russia cuts interest rates for the 3rd time in a row
Russian Ruble. (Photo: istock)
This is the first time interest rate 3 in a row of this agency in recent times. In this time, the ruble interest rate continued to be reduced by 3 percentage points to 11%.
This decision was made after new data showed that Russia’s inflation had decreased slightly compared to the previous month, thanks to the appreciation of the ruble and the decline in inflation expectations of people and businesses.
The Central Bank of Russia assessed that the risk of instability in the country’s financial markets has reduced somewhat, although the external situation remains a great challenge for the economy due to Western sanctions.
Previously, the Central Bank of Russia reduced its key interest rate to 14% in April 2022, a few weeks after an emergency rate increase to 20% to cope with the impact of the special military operation deployed in the country. Ukraine from 24/2.
Thus, since February, the Central Bank of Russia has reduced key interest rates by a total of 9%. This bank also left open the possibility of continuing to cut key interest rates in the upcoming meetings.
The Central Bank did not mention Russia’s inflation forecast for 2022 – previously forecast at 18-23%, however it expects inflation to fall to 5-7% in 2023 before hitting its 4% target in the year 2024.
According to the Russian Economy Ministry, as of May 20, inflation had fallen to 17.51% from 17.69% a week earlier, amid a drop in consumption, but it was still near the highest level since since the beginning of 2002.
On May 25, Russian President Vladimir Putin ordered a 10% increase in pensions and minimum wages to minimize the impact of inflation on Russians. The next interest rate decision meeting of the Central Bank of Russia is scheduled to take place on June 10.
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