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Главная \ News \ The Central Bank lowered its key rate to a record 4.5%

The Central Bank lowered its key rate to a record 4.5%

The Bank of Russia announced a key rate cut by one percentage point at once – up to 4.5%. This is a historical minimum, follows from the data of the regulator.
The Central Bank noted that due to long-term restrictive measures due to coronavirus, disinflation factors “act stronger than previously expected”. The influence of short-term inflationary factors is “largely exhausted”. Risks to financial stability decreased, and inflationary expectations of the population and business decreased.

“Under these conditions, there is a risk of a significant deviation of inflation down from the 4% target in 2021. The decision at a key rate is aimed at limiting this risk and keeping inflation close to 4%”, the report said.
Earlier, Central Bank Chairman Elvira Nabiullina announced the possibility of lowering the key rate by a “more decisive step”, including by 1 pp. She said that a moderate reaction to inflationary expectations allowed in April to switch to a soft monetary policy. According to the forecast of Sberbank, by the end of September, the rate may drop to 4%.
In April, the Central Bank lowered its key rate to 5.5%, in March the rate was kept at 6%, and before that, the rate had been reduced six times in a row since October.

 

Source: www.kommersant.ru

News
The Russian economy continues to lose its attractiveness in the eyes of large transnational businesses as consumers become poorer and the government continues the sanctions war with the West.

The Washington Institute of International Finance (IIF) sharply improved its forecast for the Russian economy. Its experts revised estimates of the fall in GDP in 2020 from minus 4.8% to 3.6%.

Net capital outflow from Russia by the private sector by the end of 2020 increased 2.2 times compared to the same period last year and amounted to $47.8 billion.

The decline in foreign direct investment (FDI) in the Russian Federation in January-September 2020 amounted to about 80%, according to the report of the World Bank (WB).
Net capital outflow from Russia since the beginning of the year has approached $48 billion.
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