Russia’s central bank cut its key interest rate by 50 basis points to 11 percent on July 31, saying the risks of an economic cooldown now outweigh the risk of inflation.
In a statement, the bank also said an unexpectedly severe contraction of demand in Russia during the first half of 2015 means it may lower its forecast for economic output.
The bank had previously forecast a 3.2 percent contraction of Russia’s gross domestic output (GDP) during 2015.
A recent fall of the ruble’s value to 60 rubles per U.S. dollar threatens to reignite inflation in Russia.
The ruble fell further after the interest cut, trading in the afternoon at 61 against the dollar.