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CBR Cut Rates by 150bps, a Larger Cut Than Forecast

RUSSIA

Central Bank of Russia cut rates by 150bps to 9.50%, a larger cut than the 100bps expected.

Full CBR statement here: https://www.cbr.ru/eng/press/pr/?file=10062022_133...


Highlights of the statement:

  • External environment remains challenging
  • Inflation is slowing faster and decline in econ activity is smaller than expected
  • The Bank of Russia will consider the necessity of key rate reduction at its upcoming meetings
  • Annual inflation will total 14.0–17.0% in 2022, decline to 5.0–7.0% in 2023 and return to 4% in 2024
  • Current inflation is appreciably below the Bank of Russia’s April forecast
  • Bank of Russia forecasts that the key rate will average 10.8—11.4%1 in 2022, 7.0–9.0% in 2023 and 6.0–7.0% in 2024
  • Estimates that the 2022 GDP decline could be lower than forecast in April.

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