Russian central bank cuts interest rate to 7.25 percent

Russia's central bank on Friday cut its key interest rate to 7.25 percent in its eighth consecutive reduction as inflation remains low. "The Bank of Russia board of directors decided to cut the key rate by 25 basis points to 7.25 percent," the bank said in a statement. It added it was likely to continue to ease monetary conditions in future as inflation risks fade. "Yearly inflation remains at a consistently low level. The level of inflation is expected to gradually decrease," the bank said.
It forecast annual inflation will be at 3 to 4 percent at the end of 2018 and close to 4 percent in 2019. "In these circumstances, the Bank of Russia will continue to reduce the key rate and complete a transition to a neutral monetary policy in 2018," it said, in guidance that was little changed from its previous meeting last month.
In February, inflation in Russia remained at its lowest level since the fall of the USSR at 2.2 percent over one year. "The central bank cut rates in line with our expectations," said Renaissance Capital economist Oleg Kouzmin. "We expect a continuation of front-loaded rate cuts in 2018, and expect 25 point rate cuts both in the April and June (central bank) meetings," Kouzmin said.