Moscow (The Times Groupe)- The Russian central bank cut its key interest rate by 150 basis points to 9.5% in June, bringing borrowing costs back to levels before the war in Ukraine.
The market had expected a 100 basis point cut.
“The external environment for the Russian economy remains challenging and significantly constrains economic activity,” the Bank of Russia said in a statement.
“The contraction in imports due to the introduction of external trade and financial restrictions is considerably outstripping the decline in exports,” it added.
The bank also said inflation is slowing down faster and the decline in economic activity is smaller than the Bank of Russia expected in April.
In May 2022, the annual inflation rate in Russia fell to 17.1%, below expectations of 17.3%.
The ruble is trading around 58 to the dollar.