Russian central bank cuts key rate by 1 pp to 14%

MOSCOW, Mar 13 (PRIME) -- The Russian central bank has reduced the key rate to 14% annually from 15% because the economy is set to slow down with the fall expected at 3.5-4% this year, the authority said in a statement Friday.

“The decision will help alleviate these risks (of overcooling), without creating additional inflation pressure threats,” the central bank said.

Annual inflation stood at 16.7% on Wednesday, but monthly inflation fell to 2.2% in February from 3.9% in January. High annual inflation was triggered by short-term factors, such as the ruble weakening and trade sanctions, the influence of these factors will be over until the end of 2015.

Consumer prices will peak in April–June 2015, and later low economic activity push prices down. In March 2016, the annual CPI, or consumer price inflation, will stand at 9%, and in 2017, it will reach the central bank’s target notch of 4%, it said.

The central bank scheduled its next meeting for April 30, and it will again consider key rate changes.

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