According to a Reuters survey, analysts expected an interest rate cut of 50 basis points.
“The external environment for the Russian economy remains difficult and continues to significantly limit economic activity,” the bank wrote in its statement, noting at the same time that the decline in business activity was slower than expected in June – CNBC Reports.
This is the fifth rate cut by the Russian Central Bank so far this year, after raising rates from 9.5 percent to 20 percent at the end of February, following Moscow’s invasion of Ukraine.
In June, it cut the interest rate by 150 basis points to 9.5 percent, which was in effect at the start of the occupation.
In its announcement, CBR said a further slowdown in inflation was due to “the effect of a series of one-off factors and declining consumer demand.”
The annual inflation rate fell to 15.9 percent in June from 17.1 percent in May, and was last estimated at 15.5 percent on July 15.
The bank said that the future decision on the key rate will be guided by inflation dynamics related to the target and “economic transformation processes”, as the country attempts to transform its economy in order to adapt to the long and heavy run. Economic sanctions for Western powers.
