Bank of Russia Leaves Key Interest Rate at 7.5%

By Paul Hannon

Russia's central bank Friday left its key interest rate at 7.5%, after a sequence of six straight cuts that lowered borrowing costs below their pre-war level.

The Bank of Russia also said it expects the economy to contract less sharply than it did when Western sanctions were first imposed in response to the invasion of Ukraine.

The central bank's first move as Western sanctions were rolled out and the ruble slumped in the wake of the February invasion was to more than double the key rate, but a rebound in the currency opened the way for a sequence of cuts.

In a statement, the central bank said the government's decision to raise recruitment to the armed forces would have an impact on the economy.

"The partial mobilisation will serve as a deterrent to consumer demand and inflation over the horizon of coming months," it said in a statement. "However, its subsequent effects will be pro-inflationary as it adds to supply-side restrictions."

Write to Paul Hannon at [e-mail]

(END) Dow Jones Newswires

10-28-22 0657ET