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Russian Central Bank Lowers Key Rate, Says Economy May Shrink Up To 6 Percent

Updated

An exchange office shows the exchange rate of the Russian ruble and U.S. dollar, euro in Moscow on April 21.

Russia's central bank has lowered its key interest rate by half a percentage point to 5.5 percent, the lowest level in six years, to help ease the economic impact of the coronavirus outbreak.

The Bank of Russia said on April 24 that because of the pandemic and plunging oil prices, the country's resource-dependent economy will shrink by 4 percent to 6 percent this year, compared with a previous expectation of growth between 1.5 percent and 2 percent.

The bank said that it expected growth to recover next year to 2.8-4.8 percent, before slowing to 1.5-3.5 percent in 2022.

"The situation has changed dramatically" since the board last met in March, with "significant restrictive measures" introduced worldwide slowing down the economy, the bank said.

Separately, bank Chairwoman Elvira Nabiullina said gross domestic product may slip up to 8 percent in the second quarter.

"Although there will be a recovery of the economy in 2021, it will not fully compensate for the economic decline in 2020," she also said

Russia has recorded 68,622 confirmed cases of the coronavirus, including 5,849 new cases from April 23 to April 24, and 615 deaths in total.

More than 2.55 million people have been tested in the country, with about 2.7 percent of those testing positive, according to the federal anti-coronavirus crisis center.

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