Russia’s Central Bank Cuts Key Interest Rate: Banking Sanctions Update for April 23-30, 2022
4/29/2022
On Friday, April 29, Russia’s central bank cut its key interest rate for the second time this month as the country addresses steep inflation following crippling sanctions.
According to the Wall Street Journal, “The Bank of Russia lowered its key interest rate to 14% from 17%, having already cut borrowing costs from 20% on April 8. Policy makers led by central bank chief Elvira Nabiullina, doubled the key rate in an emergency meeting on Feb. 28 as they scrambled to support the ruble after Western governments froze almost half of the country’s foreign exchange reserves.”
In a statement announcing the reduction in the key rate to 14% from 17%, the Bank of Russia said the ruble's rebound from sharp losses in the days immediately following Russia's February 24 invasion of Ukraine had slowed the surge in consumer prices during the subsequent weeks. "The external environment for the Russian economy remains challenging and significantly constrains economic activity," the central bank said. "With price and financial stability risks no longer on the rise, conditions have allowed for the key rate reduction."
According to Reuters, “The central bank said consumer inflation was on track to accelerate to 18-23% in 2022, far exceeding the 4% target, which could be reached in 2024. It was at 17.6% as of April 22.”
Related sanctions news:
- Germany Closer to Backing EU Push to Sanction Russia’s Sberbank (Bloomberg)
- Hungary’s OTP Bank “Pressured” by Ukraine to sell Russian unit, CEO says (Global Banking & Finance Review)
- Sanctioning Russia and the Future of the Dollar (Washington Post)
- Credit Suisse CEO: We’ve Made Progress on Winding Down Russia Exposure (CNBC)
- Renault in Talks to Sell Russia Business for One Ruble (WSJ)
- Hungary's OTP Bank "Pressured" by Ukraine to Sell Russian Unit, CEO Says (Reuters)