Russia’s central bank has cut its benchmark interest rate to 14% from 14.25% despite a spike in inflation linked to Ukrainian drone attacks on major oil refineries and e-commerce warehouses.
Economic Impact
The rate cut was a surprise, as most analysts had expected the central bank to keep its key rate on hold due to rising fuel prices. The central bank also suggested that the economy might not grow at all this year, cutting its growth forecast to between zero and 1%.
The bank raised its 2026 inflation forecast to between 6% and 7%, citing the considerable rise in fuel prices. Ukrainian attacks on Russian oil refineries have disrupted gasoline supply, leading to long queues at filling stations and higher fuel prices.
The consumer price index rose by 0.9% in June, before the attacks on Wildberries, following a 0.2% increase in May, while annual inflation was 6%, compared to 5.3% a month earlier.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
