Bank of Russia back to pre-crisis policies

The Central Bank has lowered its key rate significantly, to 9.5% from 11% at today’s meeting, according to a statement on the mega-regulator’s website.

The key rate is now back to its pre-crisis level – it was 9.5% before the start of the special operation in Ukraine. The regulator sharply raised it to a record 20% in February in an effort to prevent the total collapse of the ruble.

As a reminder, the regulator began an upward cycle even before the February developments to relieve inflationary pressure.

The Central Bank explained the new easing of its monetary policy by a significant slowdown in the current rate of price growth: inflation in May slowed to 17%, which was below the projections that the financial authorities made in April.

Consumer prices only rose by a small margin in May and the first week of June, Central Bank experts note.

Analysts believe that the mega-regulator’s decision will not have an impact on the ruble exchange rate because it had been expected by market participants.

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