Following official confirmation that the annualised rate of inflation in Russia is now 2.7% – far below the Central Bank’s 4% target – the Central Bank has bowed to the inevitable and has cut its key interest rate by 25 base points to 8.25%.
Though any interest rate cut in this situation is welcome, it is important to say that the latest cut merely reduces Russia’s real interest rates from 5.7% to a still crushing 5.55%. These real interest rates are actually higher than the real interest rates Russia experienced during the inflation spike of 2015.
No comments:
Post a Comment