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Surprise! Bank of Russia Cuts Interest Rates by 3% and Announces Further Rate Cuts

The Russian Central Bank cut interest rates by 3% to 17% at its meeting today and signaled that further rate cuts will follow.

Today’s announcement of an interest rate cut took the market by surprise. It comes ahead of the central bank’s regular monetary policy meeting scheduled for April 19.

“Today’s decision reflects changes in the balance of risks in consumer price index expansion, declines in economic activity and financial stability risks,”

the statement of the Russian Central Bank said.

The central bank is likely to continue to cut interest rates, stating that annual inflation will continue to rise. This was due to the comparison with the low base figures of last year.

Earlier, the central bank left its key interest rate unchanged at 20% at its March meeting after raising it to 20% from 9.5% at the Feb. 28 meeting to stabilize the ruble after it fell to a record low. The ruble was hit by sanctions imposed by the U.S. and its allies in response to Russia’s military invasion of Ukraine.

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