Russia Cuts Key Rate and Invokes Caution on Iran War’s Impact

Russia’s central bank chief struck a cautious note on the impact of the Middle East conflict, suggesting officials may have leaned toward more aggressive easing absent hostilities there.

With the Russian economy under pressure from high borrowing costs, sweeping sanctions and the effects of the invasion of Ukraine, policymakers cut the key rate by 50 basis points to 15%. Added to a reversal in the ruble after a period of relative strength, officials faced a complex environment as a shock to oil prices may change the budget calculus while also posing new inflation risks.