Russia’s central bank has cut its policy rate. The apex bank on Friday said that inflation is coming down due to fall in consumer demand. The bank has reduced the rate by 1.5 percentage points to 8.0 percent.
Russia’s central bank has cut its policy rate.
Russia’s central bank has cut its policy rate. The apex bank said on Friday that due to the fall in consumer demand inflation getting less. The bank has reduced the rate by 1.5 percentage points to 8.0 percent. He said that inflation has come down. Whereas, the decline in business activity has been slower than expected in June.
Challenging environment for Russian economy: Russia’s central bank
However, the central bank said in a statement that the external environment for the Russian economy remains challenging and economic activity has been significantly disrupted.
Earlier, the European Central Bank (ECB) on Thursday raised the policy rate by 0.5 percent for the first time in 11 years. This increase in the prime interest rate is more than expected. With this, the ECB has now come in line with the US Federal Reserve and central banks of other major countries of the world, which have raised interest rates to control inflation. This move of the central bank will make the loan costly. ECB President Christine Lagarde said that economic activity is slowing down. Russia’s attack on Ukraine has had an impact on growth.
Other countries are considering increasing the rate
Apart from this, let us tell you that in order to control rising inflation, the Governor of the British Central Bank, Andrew Bailey has already expressed the possibility of increasing interest rates. Since December 2021, the Bank of England has raised interest rates five times. Like Britain, the US economy is also plagued by inflation. Inflation in the US has reached a record level of four decades with 9.1 percent in June.
In the month of June, the inflation rate in America reached a new record of 9.1 percent in 40 years. An important meeting of the Federal Reserve is going to be held on July 26 and 27. The Federal Reserve is expected to increase the interest rate by 75 basis points.
Due to this questions are being raised whether the competition to increase the interest rate will not put the big economies in the grip of recession. Due to cheap loans, people spend more on food items, fuel and other things.
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