The Central Bank will lower its key interest rate to 11.5%

The Board of Directors of the Bank of Russia on June 15 decided to reduce the key rate c of 12.5% to 11.5% per annum. The change will take effect from June 16. Its decision, the regulator explained further weakening of inflationary risks risks while maintaining a significant cooling of the economy. The Bank of Russia expects that by June 2016, inflation will be below 7%, and in 2017 will be released at the target level of 4%. "The slowdown in consumer prices was largely due to lower consumer demand in the face of substantial reductions in real incomes and the strengthening of the ruble in February-may. In addition, completed the process of adjustment of prices to be introduced in August 2014, foreign trade restrictions, and this factor did not exert additional inflationary pressure," the statement reads. According to the regulator, Russia's GDP will shrink by the end of the year by 3.2%. Further, the situation will depend on the dynamics of energy prices. The Central Bank believes that the main sources of inflationary risks are possible deterioration of external economic conditions, the persistence of inflation expectations at elevated levels, the revision is scheduled for 2016-2017 rate of growth of regulated prices and tariffs and the easing of fiscal policy, reports "Interfax". As written, the Internet portal "Kuban 24", the last time the Bank of Russia cut its key interest rate in may.