The Central Bank reduced the key rate to 7.25%

The Bank of Russia cut its key rate by 25 bp. - thus from July 29 it will be 7.25%.

• Prior to this, the regulator also reduced it by 25 bp in June. - up to 7.5%. Economists were sure that the decline would happen a second time, the head of the Central Bank, Elvira Nabiullina, spoke about the same.
• Most analysts had expected a 25bp decline, but some did not rule out a larger decline to 7%.
• The ruble barely reacted to the decision of the Central Bank - the rate fell slightly against the euro and the dollar.
• The Central Bank allowed another rate cut this year and a transition to a neutral monetary policy in the first half of 2020.
• The economy is growing below expectations, and inflationary risks are lower than disinflationary ones due to low demand, the Central Bank states.
• For several years, the Central Bank has included in its macro forecast a real equilibrium rate of 2-3%, which means that it will stop cutting the key rate when it reaches 6.5% with a target inflation of 4%.
• What is the real potential of the Central Bank rate cut, and how it will affect deposits and loans, we wrote here .

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