Russia Holds Interest Rate as Inflation Fears Weigh
Russia's central bank on Friday held its key interest rate for the second month running as it balanced worries over inflation against trying to resuscitate its crisis-hit economy.
The bank said that it had left the rate unchanged at 11 percent "in recognition of persistent substantial inflation risks" but insisted it could start cutting again in the future as weak domestic demand pushes down inflation pressures.
Russia's economy has nosedived on the back of lower oil prices and Western sanctions over the crisis in Ukraine and is expected to shrink by some 3.8 percent this year.
The World Bank recently ditched an earlier forecast of a gentle recovery in 2016, predicting instead a further decline of 0.6 percent next year, with a rebound only appearing in 2017.
Russia's central bank dramatically hiked its base rate last December as the ruble tumbled but started trimming it earlier this year as the currency recovered slightly.
A fresh slump in the ruble slammed the breaks on any cuts and cast doubt on official claims that Russia had weathered the worst of the economic storm.
The central bank said the annual inflation stood at 15.6 percent as of late October.
The economic crisis roiling the country has seen the poverty rate soar by to 15.1 percent of the population, or some 21.7 million people.
Source: Agence France Presse
| Copyright © 2012 Naharnet.com. All Rights Reserved. | https://www.naharnet.com/stories/en/193223 |