YEREVAN, April 30. / ARKA /. Russia’s Central bank has cut the benchmark interest rate to 12.5 percent from 14 percent, saying inflation and risks to the ruble have subsided while economic growth is suffering.
The 150 basis point cut marks the third reduction in interest rates this year as the regulator said there are “persistent risks of considerable” economic cooling.
“Amid ruble appreciation and significant contraction in consumer demand in February-April 2015, monthly consumer price growth declines and annual inflation tends to stabilize,” the Central Bank of Russia said in the statement Thursday.
The new rate comes into effect May 5.
“As inflation risks abate further, the Bank of Russia will be ready to continue cutting the key rate,” the statement said.
The bank has already cut the interest rate twice in 2015, by one percentage point in March and by two percentages points in January. Both have been efforts to backtrack on the 6.5 percent increase to 17 percent on December 16, which was done in an attempt to put a plug on the hemorrhaging ruble. M.V.-0-
