Russia unexpectedly slashes rates

MOSCOW: Russia’s central bank unexpectedly cut its key interest rate, the most in nearly two decades, offering relief to the recession-bound economy in a sign of confidence it can start to reverse some of the steep monetary tightening delivered after the invasion of Ukraine.

The central bank lowered the rate to 17% from 20% at an unscheduled meeting yesterday and said further cuts could be made in the months ahead if conditions permit.

The ruble briefly halted its rebound against the dollar and local bond yields tumbled after the decision.

“The central bank wants to be a locomotive of the economic rebound, not a brake,” said Luis Saenz, head of international distribution at Sinara.

Sweeping international sanctions have touched off inflation and put the world’s biggest energy exporter on track for a deep, two-year recession while pushing the Russian government to the edge of default. —Bloomberg