Bank Of Russia Cuts Key Interest Rate To 11.5%, Ruble Jumps

The Bank of Russia on Monday cut its key interest rate to 11.5% from 12.5%, in response to lower inflation risks and fears of a considerable slowdown in the economy. The central bank said in a release that consumer-price growth has continued to slow on the back of weaker consumer demand and ruble appreciation in the February-to-May period. "The Bank of Russia will be ready to continue cutting the key rate as consumer-price growth declines further in compliance with the forecast, but the potential of monetary policy easing will be limited by inflation risks in the next few months," the bank said. The ruble jumped after the rate decision, with the dollar buying 54.961 rubles, down from as high as 56.751 earlier in the day.