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Russia Cuts Interest Rate Again
Russia's central bank has reduced its main lending rate by one point to 14% in an effort to aid the country's deepening economic woes.
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Russia's central bank has reduced its main lending rate by one point to 14% in an effort to aid the country's deepening economic woes.
The cut follows a 2-point reduction in January. Both steps ease the bank's dramatic 6.5-point hike in the rate to 17% in December. That increase was intended to buttress the country's collapsing ruble, which last year lost half its value against the U.S. dollar. The currency has since stabilized.
Now the central bank says reviving Russia's economy is a higher priority. The bank expects Russia's economy to shrink 3.5%-4% this year and 1%-1.6% in 2016 before expanding 6% in 2017.
Economists say the bank hopes to provide stimulus without worsening the country's 16.7% inflation rate. The bank predicts Russia's inflation rate will drop to about 12% by year-end.
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