Russia’s Central Bank unexpectedly slashes rate to 15%, ruble reels

Saturday, January 31, 2015
By Paul Martin

RT.com
January 30, 2015

The Russian Central Bank has cut its key interest rate to 15 percent from 17 percent due to the ‘shift in the balance of risks of accelerated consumer price growth and cooling economy,’ according to a statement from the regulator.

The 200 basis point cut comes a month and a half after the bank raised the rate to 17 percent on December 16 in a failed attempt to control the massive devaluation of the ruble.

Growth in Russia slowed in 2014, and isn’t expected to have expanded more than 0.5 percent. The Central Bank forecasts GDP will fall by 3.2 percent in the first six months of 2015, compared to the same period last year. A rate cut had an immediate negative effect on the ruble and Russian stocks.

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