MOSCOW (AP) — The Russian Central Bank has cut its key interest rate by 1.5 percentage points to 12.5 percent to stimulate the economy as it heads into recession.
The bank said a reduced threat of runaway inflation, which slowed slightly to 16.5 percent in April, had made the cut possible, but said there remained a risk of "a significant cooling of the economy."
Thursday's rate cut is the third since December, when the Central Bank raised rates to 17 percent overnight to defend the then-plummeting value of the ruble.
The bank did not update its prediction that the economy will shrink by between 3.5 percent and 4 percent this year, although it did say that indicators point to "a significant decline in GDP in the first quarter" of the year.
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