Categories: Market Overview

Russia cuts key interest rate and slashes forecasts as coronavirus and oil price plunge take hold

The Bank of Russia on Friday cut its key interest rate by 50 basis points to 5.5% and left the door open to further reductions at future monetary policy meetings. The move comes as the spread of the coronavirus pandemic and a historic plunge in oil prices of late pose unprecedented threats to the Russian economy.

The central bank slashed its economic forecasts, projecting that Russian GDP (gross domestic product) will decline by between 4% and 6% in 2020, recovering to grow by between 2.8% and 4.8% in 2021 and 1.5% to 3.5% in 2022.

As of Friday morning, Russia had confirmed more than 65,000 cases of the coronavirus, and Kremlin spokesman Dmitry Peskov told CNBC earlier this week that the country, and President Vladimir Putin, faces a “very problematic” situation.

The Bank of Russia also revised its inflation forecast, projecting between 3.8% and 4.8% for 2020 with a stabilization at its 4% target in the future. In its press release Friday, the Bank of Russia said disinflationary pressure from shutdowns compensated for inflationary factors such as the fall in oil prices.

This marks Russia’s seventh rate cut in the past year. Prior to holding the rate steady at 6% in March, the central bank had issued six consecutive cuts. The dollar rose by around 0.8% against the Russian ruble following the announcement.

Russia cuts key interest rate and slashes forecasts as coronavirus and oil price plunge take hold, CNBC, Apr 24

The FxPro News Team

This team of professional journalists announces the most interesting and influential articles from the major financial media as a brief summary. All such news may have sufficient potential to affect the course of trading assets.

Share
Published by
The FxPro News Team

Recent Posts

EURCHF Wave Analysis 20 December 2024

- EURCHF falling inside minor impulse wave 5 - Likely to fall to support level…

2 days ago

USDCHF Wave Analysis 20 December 2024

- USDCHF reversed from resistance zone - Likely to fall to support level 0.8860 USDCHF…

2 days ago

The US dollar ends the year on a strong note

The US dollar is at two-year highs. Factors such as changes in the Fed's monetary…

3 days ago

How deep will crypto dive?

The crypto market is experiencing a decline, with a potential further drop in value. Bitcoin…

3 days ago

EURGBP Wave Analysis 19 December 2024

- EURGBP reversed from support zone - Likely to rise to resistance level 0.8300 EURGBP…

3 days ago

EURJPY Wave Analysis 19 December 2024

- EURJPY broke resistance zone - Likely to rise to resistance level 165.00 EURJPY currency…

3 days ago

This website uses cookies