MOSCOW, May 26 (Xinhua) -- Russia's central bank decided Thursday to lower its key interest rate by 300 basis points to 11 percent.
The new rate is set to take effect from Friday thanks to a "significant slowdown in the current price growth rates" and a certain degree of easing in inflationary pressure, the bank said in a statement.
"Funds continue to flow into fixed-term ruble deposits while lending activity remains weak. This limits pro-inflationary risks and makes it necessary to ease monetary conditions," said the Bank of Russia.
Nonetheless, external conditions remain challenging, and the central bank will take account of expected inflation dynamics and all potential risks in future key-rate decision-making, it said, adding that it was still open to "the prospect of key rate reduction at upcoming meetings."
According to the bank's forecast, annual inflation will decrease to 5-7 percent in 2023 and return to 4 percent in 2024. ■