Russian central bank cuts key rate to 8%, above expectations

By Aysu Bicer

ANKARA (AA) - Russia's central bank cut its key interest rate 150 basis points to 8% in July, well above market forecasts for a smaller cut of 50 basis points.

"The external environment for the Russian economy remains challenging and significantly constrains economic activity," the Bank of Russia said in a statement.

Yet, it said the decline in business activity is slower than the bank expected in June.

"Current consumer price growth rates remain low, contributing to a further slowdown in annual inflation," it underlined.

In June, Russia's annual inflation diminished to 15.9% after 17.1% in May.

According to the central bank's forecast, annual inflation will go down to 12-15% in 2022, to 5-7% in 2023, and return to 4% in 2024.

Monetary conditions continued to ease, but generally remained tight as inflation expectations declined, it said.