By Mucahithan Avcioglu
ISTANBUL (AA) - The Russian Central Bank decided Friday to lower its key interest rate by 100 basis points to 17%, saying the Russian economy continues to return to a balanced growth path.
The key rate currently stands at its 10-month low, as the decision marked the third consecutive rate cut.
Markets had expected a 200-basis-point rate cut for this meeting.
"Underlying measures of current price growth have not changed significantly and generally remain above 4% in annualized terms," the central bank said in a statement, adding that the inflation expectations remain high.
The bank stated that it will maintain monetary conditions "as tight as necessary" to return inflation to the target in 2026.
"According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 6.0–7.0% in 2025, return to 4.0% in 2026 and stay at the target further on," it noted.
The Central Bank of Russia raised its policy rate to 20% immediately after the outbreak of the Russian-Ukrainian War.
The policy rate was held at 16% from the end of 2023 until the end of July 2024, with four consecutive interest rate increases in 2024.
In its June meeting, the bank lowered its policy rate for the first time since September 2022, from 21% to 20%, before cutting it to 18% at its previous meeting.
While the annual inflation in the country was at around 9.5% in July-August, the bank aims to reduce it to 4%.