Russian Central Bank cuts key policy rate to 6% from 6.25%

• Bank of Russia cuts policy rate by 25 basis points in January.
• Bank leaves the door open for further rate cuts at upcoming meetings.
• USD/RUB climbs to daily fresh highs, adds nearly 1%.

Russia’s central bank on Friday announced that it cut its key interest rate by 25 basis points to 6%. With the initial reaction, the USD/RUB continued to edge higher and was last seen trading at 63.8667, adding 0.82% on a daily basis.

Key takeaways from the policy statement

"If the situation develops in line with the baseline forecast, the Bank of Russia holds open the prospect of further key rate reduction at its upcoming meetings."

"In this context, given the monetary policy stance, annual inflation will come in at 3.5–4.0% in 2020 and will remain close to 4% further on."

"In key rate decision-making, the Bank of Russia will take into account actual and expected inflation dynamics relative to the target and economic developments over the forecast horizon, as well as risks posed by domestic and external conditions and the reaction of financial markets."