Russia Cuts Key Rate By 50 Bps

(RTTNews) - Russia's central bank lowered its key rate by a half-percentage point on Friday after slashing the rate by 150 basis points in July.

The Board of Directors of Bank of Russia decided to reduce the benchmark rate by 50 basis points to 7.50 percent from 8.00 percent. The outcome of the meeting matched expectations.

In case of a further budget deficit expansion, tighter monetary policy may be required to return inflation to target in 2024 and keep it close to 4 percent further on, the bank said in the statement.

The bank estimated annual inflation to fall to 5.0-7.0 percent in 2023 from an estimated 11.0-13.0 percent in 2022. Inflation is expected to return to 4 percent in 2024.

The bank today said the decline in GDP for this year is likely to be closer to the upper bound of the July forecast range -6.0 percent to -4.0 percent.