The Central Bank of the Russian Federation cut its key interest rate for the third time in the year, lowering it by 25 basis points to 7.0% amid lagging inflation and GDP growth amid heightened risk of a global economic slowdown.
Annual consumer price inflation decelerated to 4.3% in August from 4.6% in July, the central bank noted. Consequently, the bank now expects annual inflation in the range of 4.0% to 4.5% for the year, compared to a previously estimated range of 4.2% to 4.7%.
Russia's GDP growth continues to trail the bank's expectations as demand for Russian exports and investment activity are weak. As such, the bank lowered its GDP growth forecast range to 0.8% to 1.3% from 1.0% to 1.5% for 2019 and revised the forecast for 2020-2021 downward.
The bank anticipates growth to accelerate to about 2% to 3% by 2022 if the government's measures for "overcoming structural constraints, including the implementation of national projects," are realized.
The Russian central bank kept the door for further policy easing open.
