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Russia cut interest rates for the first time since March 2018 as inflation retreated closer to the central bank’s target.
The key rate was cut to 7.50% from 7.75%, according to a statement on Friday. That matched 33 forecasts in a Bloomberg survey, while two economists expected no change. Bank of Russia Governor Elvira Nabiullina will hold a news conference at 3pm in Moscow.
Read our live blog for more on the Russian rate decision
Traders are on the lookout now for signs of more easing to come later in the year as growth slows and expectations rise for a rate cut from the Federal Reserve. Most economists are forecasting a second rate cut in September, and some see another one by the end of the year.
- Russia is part of a dovish tilt across the developing world as escalating global trade woes weigh on growth. Chile and India also lowered their benchmark rates recently.
- Nabiullina warned last week that there’s no rush to undo two surprise rate hikes imposed last year as inflation jumped
- Annual inflation decelerated for a second month in May, reaching 5.1%. Price growth may slow to the 4% target already this year, according to Bank of America Merrill Lynch
- Growth slowed sharply in the first quarter, in part due to a value-added-tax hike, expanding 0.5% from year ago after a 2.7% jump in the previous quarter
--With assistance from Zoya Shilova.
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