Central Bank of Russia sees positive: down rates

The Central Bank of Russia has cut interest rates citing more positive inflation trends and stable. The high inflation fears and still potentially rising reduces, the institute led by Governor Elvira Nabiullina has lowered the cost of money by 50 basis points, now fixed at 10.5% from 11% previously.

The last time the Bank of Russia has cut interest rates dates back to August 3, 2015, from 11.5% to 11%. "The easing of inflationary pressures allows us to hope for a sustainable reduction in the index of prices to below 5% in May 2017, to 4% target towards the end of next year," said the institute in a statement . The next meeting is expected on July 29.

In the first three months of the year, the Russian economy recorded a 1.2% contraction less acute than expected by analysts, who had indicated a decline of 2.1%. According to the Russian Finance Minister Alexey Ulyukaev, GDP in the second quarter is expected to contract further by 0.6% and then stabilize in the next three months, marking a 1.2% recovery.