-Russian Central Bank cuts interest rates
The Central Bank of Russia continued to lower interest rates by 0.25 basis points to 6% in line with macroeconomic expectations but also in consideration of the outbreak of the coronavirus, as per the bank’s statement made on Friday.
Noting the ongoing inflation risks in the country, the bank emphasized that the global economy faces significant slowdown risks due to the coronavirus epidemic.
According to the statement, the forecast for the year-end inflation rate in Russia is maintained at 3.5% to 4% with the likelihood that the bank will continue to cut interest rates at future meetings.
Due to sanctions and the oil price drop, the policy rate, which was 7% in March 2014, rose to 17% in December 2014.
The Central Bank of Russia, which has been gradually lowering interest rates from 17% since the beginning of 2015, decreased its policy rate to 6.25% in December last year.
Russian Energy Minister Alexander Novak commented on the effects of the coronavirus on global oil markets with a cautious message.
"We are not ready to comment before we understand the situation and receive clear predictions about the impact of the coronavirus on the global oil markets. Russia's position is not clear yet, it takes time to assess the situation," he said.
Brent crude dropped below $60 per barrel two weeks ago, and so far this week has traded at an average of $55.
International credit rating agencies Moody's and Fitch stated in their recent reports that the demand for oil may fall due to the coronavirus epidemic, which would create a downward pressure on prices.