Russia’s central bank cut interest rate for the third time in just over a month and said borrowing costs can fall further still, halting a rally in the ruble as it unwinds the financial defenses in place since the invasion of Ukraine.
The Bank of Russia lowered its benchmark to 11% from 14% on Thursday at an extraordinary meeting it announced only a day earlier.
After nine percentage points in easing since April, the central bank said it still “holds open the prospect” of more cuts at meetings ahead. In a statement accompanying the decision, policy makers made little mention of the ruble beyond noting the exchange rate contributed to slower inflation.
“External conditions for the Russian economy are still challenging, considerably constraining economic activity,” they said. “Financial stability risks decreased somewhat, enabling a relaxation of some capital control measures.”