MOSCOW; The Bank of Russia, the country’s central bank, cut its key lending rate by 0.25 percentage points to 7.25 percent on Friday, citing a continued inflation slowdown. Consumer price growth rate declined to 4.7 percent year-on-year in June from 5.1 percent in May, and was close to an estimated 4.6 percent as of July, the bank said in a statement.
Seasonally adjusted consumer price growth rate slowed down to 0.1 percent month-on-month in June versus 0.3-0.4 percent in February-May, the central bank added. Inflation continued to ease due to the ruble’s appreciation since the beginning of the year and the decline in fruit and vegetable prices on the back of an early harvest, it said.
The bank said that Russia’s economic growth rate since the beginning of the year has been lower than it expected due to sluggish investment and weak exports as external demand decreased. The second quarter saw a rise in industrial production growth, but it may not be steady as retail sales continued to shrink amid falling real disposable household incomes, according to the bank. The bank admitted the possibility of a further rate cut at the next meeting of its board in September.