Russia’s central bank lowered its benchmark interest rate to 20 percent on Friday, easing it from a two-decade peak of 21 percent as signs of economic cooling and easing price pressures emerged.The move marked the regulator’s first rate cut since September 2022 and followed growing calls from businesses and political quarters who said the high borrowing costs were choking investment and stalling growth.According to AFP, the bank said in a statement that the economy was “gradually returning to a balanced growth path,” while also cautioning that monetary policy would “remain tight for a long period.”The inflation rate remains above 10 percent, but the central bank noted that price pressures are “continuing to decline.” Russia officially targets inflation at 4 percent but does not expect to return to that level until 2026.Since its full-scale offensive on Ukraine began in 2022, Russia’s economy has faced intense volatility. The Kremlin ramped up military spending to support the war effort, pouring funds into weapons production and troop logistics — a push that temporarily bolstered growth despite sweeping Western sanctions.Friday’s move follows months of policy pressure, with the central bank walking a tightrope between supporting growth and containing inflation risks.
