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  • CBR cuts key rate by 25 basis point to 7% in September.  
  • Bank voices readiness to cut rates further if needed.

Russia’s central bank on Friday announced that cut its key interest rate  to 7% from 7.25%.

Despite the rate cut, the initial market reaction caused the USD/RUB to fall to its lowest level since August 23 at 65.8623. As of writing, the pair was down 0.45% on the day at 65,9254. Below are some key takeaways from the bank’s policy statement, as reported by Reuters.

“If the situation develops in line with the baseline forecast, will consider the necessity of further key rate reduction at one of the upcoming board of directors’ meetings.”

“Annual consumer price growth rate declined to 4.3% in August (from 4.6% in July 2019).”

“According to the estimates, most inflation indicators reflecting the most sustainable price movements are close to 4%.”

“Disinflationary and pro-inflationary risks are balanced till the end of the year.”

“Russian economy’s growth rate is still coming in lower than expectations.”

“GDP  growth rate forecast for 2019 lowered to 0.8-1.3%.”

“Monetary conditions have continued to ease since the last board meeting.”