AFP, Moscow :
Russia’s central bank cut its main interest rate Friday in a surprise move aimed at kickstarting the economy which is expected to contract sharply under the weight of Western sanctions and plunging oil prices.
The announcement to slash its key interest rate to 15 percent from 17 percent marked the first cut since December 2011.
The rate cut had come after the government urged the central bank to help boost the economy, prompting some analysts to accuse the bank of caving in to political pressure.
The ruble tumbled following the announcement, falling to 81 against the euro and 71 against the dollar. A day ago, it was trading at 77.6 to the euro and 68.73 to the dollar.
The bank argued that its action was “aimed at averting the sizeable decline in economic activity against the background of negative external factors”, apparently referring to US and EU sanctions as well as sliding crude prices.
It added that it had taken action now “due to the shift in the balance of risks of accelerated consumer price growth and cooling economy”.
Russia’s central bank cut its main interest rate Friday in a surprise move aimed at kickstarting the economy which is expected to contract sharply under the weight of Western sanctions and plunging oil prices.
The announcement to slash its key interest rate to 15 percent from 17 percent marked the first cut since December 2011.
The rate cut had come after the government urged the central bank to help boost the economy, prompting some analysts to accuse the bank of caving in to political pressure.
The ruble tumbled following the announcement, falling to 81 against the euro and 71 against the dollar. A day ago, it was trading at 77.6 to the euro and 68.73 to the dollar.
The bank argued that its action was “aimed at averting the sizeable decline in economic activity against the background of negative external factors”, apparently referring to US and EU sanctions as well as sliding crude prices.
It added that it had taken action now “due to the shift in the balance of risks of accelerated consumer price growth and cooling economy”.
