Economics
Russia Surprises With Bigger Rate Cut, But Says It's Not a Trend
- Governor says move part of gradual shift to neutral policy
- Not one analyst forecast decision to reduce benchmark to 7.75%
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The Bank of Russia surprised the market with a cut in its key rate that was double what economists expected, but warned that it’s not shifting into higher gear on easing.
A deal between the Organization of Petroleum Exporting Countries and its allies to maintain oil production cuts until the end of 2018 was a key factor lifting the central bank’s outlook for next year, allowing it to pull off the cut in its benchmark rate to 7.75 percent from 8.25 percent, according to a statement on Friday. The drop fueled a bond rally.