Russian Monthly Inflation Drops Sharply
(MENAFN) According to a news agency, Russia experienced a significant decline in monthly inflation during June, providing the clearest indication yet that the central bank’s prolonged use of strict monetary policy is beginning to alleviate inflationary pressures.
In reaction to the Western sanctions levied against Russia following the intensification of the Ukraine crisis three years ago, the Bank of Russia took decisive action by repeatedly increasing its benchmark interest rate.
This rate moved from 9.5% to a peak of 21% as part of efforts to stabilize the ruble and rein in rising prices.
Last month, the central bank opted to reduce its primary interest rate by 100 basis points, bringing it down to 20%.
This decision was based on observable signs that inflation was easing.
It also represented the first instance of a rate cut since 2022, when the Bank of Russia initially implemented a firm monetary approach to support the economy during a period of heightened external restrictions.
While annual inflation remains high at 9%—more than double the central bank’s target of 4%—monthly inflation growth has now fallen to a level aligned with that objective, as per data released by the Bank of Russia on Thursday.
The news agency described this development as the “first meaningful sign that the central bank’s battle against inflation may be turning a corner after a protracted period of ultra-tight monetary policy.”
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