Russia’s central bank could cut interest rates to a historic low

The Central Bank of Russia (CBR) is expected to cut its benchmark interest rate on Friday to its lowest level since the fall of the Soviet Union.

Bank Governor Elvira Nabiullina said last week that lower inflation across the first five months of the year has freed up space for the central bank to make further cuts, as it looks to shore up the economy in the aftermath of the coronavirus pandemic.

Economists are torn on the size of the reduction, with some expecting 50 basis points, bringing the rate to 5% following a 50 basis point cut in April. This equals a post-Soviet Union low reached in June 2010. Others anticipate a much more heavy-handed 100 basis point cut this time around.