This content was produced in Russia, where the law limits coverage of Russian military operations in Ukraine
MOSCOW, July 22 (Reuters) – The Central Bank of Russia lowers its key interest rate 1.5 points stronger than expected at 8.0% on Friday and said he would study the need for further reductions as inflation slows and the economy needs cheaper loans as it plunges into recession.
It was the fourth cut this year. Immediately after Moscow sent armed forces to Ukraine on February 24, the central bank raised its key rate from 9.5% to 20% in order to reverse the fall of the rouble.
In a Reuters poll earlier this week, most analysts expected a smaller down 50 basis points.
“The Bank of Russia will consider the need for a key interest rate cut in the second half of 2022,” he added. he said in a statement.
Annual inflation stood at 15.5% as of July 15according to the central bank.
This lowered its inflation forecast for 2022 12-15% of his previous assessment of 14-17%, reiterating its hope that inflation will fall to its target of 4% in 2024.
High inflation is lowering living standards and has for years been one of the main concerns of Russians, but the economy needs a boost in the form of cheaper credit to cope with the negative effects of the extensive Western sanctions.
The central bank revised its economic forecast for this year, saying gross domestic product contract 4-6%. At the end of April, he had declared that the GDP would decrease by 8 to 10%.
In 2023, the economy contract from 1 to 4%the central bank said, revising its earlier forecast that the economy would contract by up to 3% next year.
Central Bank Governor Elvira Nabiullina will shed light on the bank’s outlook and policy at a press conference at 12:00 GMT.
The next rate-setting meeting is scheduled for September 16.
(Reporting by Reuters; Editing by Kevin Liffey)
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