The Bank of Russia reduced interest rates to 5.5% per annum in the face of the Chinese coronavirus epidemic along with the collapse in oil prices on international markets, which makes up 50% of Russian federal revenues.
“On 24 April 2020, the Bank of Russia Board of Directors decided to cut the key rate by 50 bp to 5.50% per annum. Since the March Board of Directors meeting, the situation has changed dramatically. Significant restrictive measures have been introduced to combat the coronavirus pandemic both in Russia and across the world, which negatively influences economic activity,” the statement said, reported Russian state news agency TASS.
This creates material and prolonged disinflationary influence on price dynamics from the aggregate demand perspective, which offsets the effect of temporary pro-inflationary factors, including those related to the fall in oil prices, the regulator added.
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