The Bank of Russia lowered its key interest rate to a new historic low

the Board of Directors of the Central Bank of the Russian Federation following the meeting on Friday lowered its key interest rate by 25 basis points to 4.25% per annum, the press service of the Bank of Russia.

Thus, the rate is lowered for the fourth time this year and to a new historic low. Today the regulator’s decision coincided with forecasts of some analysts.

the Key rate of the Bank of Russia — the main tool of monetary policy of the regulator. The rate at which the Central Bank provides money to commercial banks. She serves as a signal of financial organizations, which focus on key rate, by providing loans and attracting deposits.

As stated the Central Bank in its press release, “the disinflationary factors continue to have a significant impact on inflation”. “Although the easing of restrictive measures on the revival of economic activity, the recovery of the global and Russian economy will be gradual. In these circumstances there is a risk of deviations of inflation down from 4% in 2021,” said the Central Bank.

“With the development of the situation in the baseline forecast, the Bank of Russia will assess the feasibility of further lowering the key rate at the next meeting”, — stated in the message.

the Next meeting of the Board of Directors of the Central Bank, which will address the issue of the level of the key rate, scheduled for September 18, 2020.

Recall also that the Russian economy in February—March 2020 was under the powerful impact of two negative factors — the rapid spread of the pandemic coronavirus infection COVID-19 and its deleterious effect on the global economy and collapse in oil prices. Against this background, the rouble significantly depreciated against the dollar and the Euro. Reacting to the situation, the government and the Bank of Russia adopted several packages of measures to support the economy and citizens.

on may 11, Russian President Vladimir Putin announced the completion of theGeneral on may 12, a single period of days off, entered March 30, in the fight against COVID-19.

on 2 June Prime Minister Mikhail Mishustin reported on the nationwide state plan for the recovery of the Russian economy in 2020-2021 years, noting in particular that the cost of the plan will amount to about 5 trillion roubles. June 19, Putin was sent a revised draft of the national plan.

July 2, Deputy Minister of Finance of the Russian Federation Vladimir Kolychev said that the total cost of the measures (the bailout package), aimed at combating the spread of coronavirus infection in Russia and mitigating economic impacts from restrictions imposed, estimated to be worth about 4 trillion rubles. According to him, the main focus of the budget measures were made on several fronts: strengthening health systems, supporting citizens and businesses, the balancing of regional budgets.

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