**Russia Lowers Interest Rate for First Time Since 2022**
The Russian central bank has made a significant decision to lower its interest rate from 21% to 20%. This move indicates that the country is starting to see easing pressures from inflation. The change in interest rate is the first since September 2022, and it marks a positive development for the Russian economy.
**A Gradual Return to Balanced Growth**
The central bank’s decision was made after a drop in inflation, which fell from 10.7% in January to 6.2% in April. According to official data, this decline is a sign that the Russian economy is gradually returning to a balanced growth path. The central bank stated that while domestic demand growth is still outpacing supply, the economy is making progress.
**A Long-Term Plan**
However, it’s essential to note that fiscal policy will remain tight for an extended period as Russia aims to return inflation to its 4% target. This means that interest rates may not drop significantly in the near future. The central bank emphasized that its goal is to ensure a stable and balanced economy.
**Pressure from Politicians**
The decision to lower the interest rate comes amid pressure from politicians, including Russian Economy Minister Maxim Reshetnikov, who urged the central bank to cut rates to boost economic growth. President Vladimir Putin has also expressed concerns about stagnating economic growth and aims to achieve a 3% growth target.
**A Complex Situation**
Russia’s economy is facing significant challenges due to international sanctions imposed after the invasion of Ukraine. The country has been forced to slash key projects across various sectors, and major exporters have reduced rail shipments of metals and oil products. In this context, the central bank’s decision to lower interest rates is a crucial step towards stabilizing the economy.
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