“The Russian central bank reduces interest rates for the first time since 2022.” – informs the” Financial Times “. cut by 1 percent point. This action reduces loan costs (main interest rate) to about 20 percent. So, for many Russians, financing from the bank is inaccessible, but this is the first step towards returning normality.
“Domestic demand still exceeds the economy's ability to increase the supply of goods and services, but Russia gradually returns to a more sustainable growth path” – said the Russian Central Bank in a statement.
See also: EBC is cutting interest rates. Inflation close to the target
Interest rate reductions in Russia. What next?
The British daily notes that the move that was expected by most economistsoccurred after the decrease in inflation and emphasizes the end of two -year GDP growth, powered by war expenses.
The Bank of Russia emphasized that Friday reduction does not mean the beginning of a sharp decline in interest ratesadding that he will “maintain monetary conditions as restrictive as necessary” to restore inflation to a temporary purpose, and for such a bank it adopts 4 percent. in 2026
“The bank found itself in a very difficult situation,” commented Janis Kluge, an expert for the Russian economy from the German Institute of International and Security, quoted by “FT”. “Although inflation is falling, its durability is uncertain, because the prices of non -food products fall, but food costs still rise and touch the poorest most strongly” – he added.
See also: There is a decision on interest rates. This is how the MPC reacts to a decrease in inflation
Record interest rates in Russia
Let us remind you that in order to limit the pace of economic growth and stop inflation, which has increased a total of about 35 percent since the beginning of the war with Ukraine, The Bank of Russia maintained interest rates at a record level of 21 percent. from October last year.
“Retail loans have almost ceased, and the increase in corporate loans became negligible. This was the price that had to be paid” – said Oleg Kouzmin, the main economist of Moscow Renaissance Capital.
