Russian Central Bank Cuts Key Rate by 300 Basis Points
Posted on 05/29/2022
Disclosed on May 26, 2022, the Bank of Russia Board of Directors decided to slash the key interest rate by 300 basis points to 11.00% per annum effective from May 27, 2022. The latest weekly data point to a significant slowdown in the current price growth rates. Inflationary pressure eases on the back of the ruble exchange rate dynamics as well as the noticeable decline in inflation expectations of households and businesses. In April 2022, annual inflation reached 17.8%, however, based on the estimate as of May 20th, it slowed down to 17.5%, decreasing faster than in the Bank of Russia’s April 2022 forecast.
The Bank of Russia Board of Directors will hold its next rate review meeting on June 10, 2022.
The Bank of Russia is speeding up on the creation of a central bank digital currency (CBDC) due to sanctions over the Russian invasion of Ukraine. The central bank could accelerate the digital ruble pilot with real transactions and users by April 2023.
Keywords: Central Bank of the Russian Federation (Bank of Russia).