Accessibility links

Breaking News

Russia Lowers Key Interest Rate As Inflation Fears Ease

The Russian central bank has lowered its key interest rate by one percentage point, to 14 percent, in an attempt to boost the country’s struggling economy.

The Bank of Russia said on March 13 that "the balance of risks is still shifted toward a more significant cooling of the economy," adding that the move would not pose "an additional threat of increased inflationary pressure."

Inflation has stabilized after rising sharply, clearing the path for efforts to boost an economy hard hit by low oil prices and Westrn sanctions over Russia's interference in Ukraine.

The cut follows a 2 percentage point decrease in January.

The central bank had raised the rate from 10.5 percent to 17 percent in December, an emergency measure aimed to shore up the rapidly falling ruble.

The bank predicts Russia's gross domestic product will decline by 3.5 to 4 percent this year.

Inflation has more than doubled from the start of 2014 and the ruble lost 46 percent of its value last year.

Based on reporting by AFP, AP, and Bloomberg