August 12, 2009
Russia's Central Bank announced on Monday it was cutting its key lending rate for the fifth time this year, by 0.25 percentage points to 10.75% per annum, following a slowdown in consumer price growth.
"The decision is conditioned by a set of macroeconomic trends, which have allowed the Bank of Russia to continue lowering interest rates on monetary policy instruments," the country's top bank said in a statement.
Analysts say the move, which came into effect on Monday, is intended to bring down interest rates on loans granted to the real sector to help domestic enterprises amid the ongoing economic crisis.
In each of the four previous interest rate cuts, the refinancing rate was lowered by 0.5 percentage points. This time, the rate was cut by 0.25%.
Russia's inflation stood at 8.1% in the first seven months of the year or 1.2% less than for the same period last year.
Russian President Dmitry Medvedev said in July that inflation in Russia could stay within 10-11% in 2009.
"Inflation has slowed amid a decline in the general volume of production. Perhaps it will be lower than we expected - not 13%, but 10-11%," Medvedev said.
Russia's Economic Development Ministry has already lowered its inflation forecast for 2009 from 13% to 12-12.5%. Last year, consumer prices grew 13.3% in Russia.