FXStreet (Mumbai) – The Bank of Russia announced a cut in the key interest rate by 0.5% to 11.00% per annum in response to major macroeconomic indicators demonstrate further economy cooling.
According to the central bank, “the balance of risks shifts towards the considerable economy cooling despite a slight increase in inflation risks. According to the Bank of Russia forecast, consumer price growth will continue to slow amid slack domestic demand. Annual inflation will fall below 7% in July 2016 and reach the 4% target in 2017. The Bank of Russia will further decide on its key rate depending on the balance of inflation risks and risks of economy cooling.”
The bank added, “the economic situation in Russia will further depend on the dynamics of world energy prices and the economy’s ability to adapt to external shocks. At the same time the scenario with oil prices remaining below US$60 per barrel for a long time is more probable than it was in June.”
The decision comes at a time when Crude prices are on the way to its fifth consecutive weekly loss.
(Market News Provided by FXstreet)