Rus­sian Cen­tral Bank raises key rate for first time since 2014

Iran Daily - - Tse & Global Economy -

The Rus­sian Cen­tral Bank raised its key lend­ing rate un­changed in six months by 0.25 per­cent­age points to 7.5 per­cent on higher in­fla­tion ex­pec­ta­tions.

It was the first rate hike since 2014 when a cur­rency cri­sis broke out fol­low­ing West­ern sanc­tions, Xin­hua re­ported.

“Changes in ex­ter­nal con­di­tions ob­served since the pre­vi­ous meet­ing of the Board of Di­rec­tors have sig­nif­i­cantly in­creased pro-in­fla­tion­ary risks,” it said in a state­ment.

The bank now fore­casts Rus­sia’s an­nual in­fla­tion to be 3.8-4.2 per­cent this year, com­pared to its pre­vi­ous fore­cast of 3.5-4.0 per­cent.

An­nual in­fla­tion will peak in the first six months of 2019, reach­ing 5.0-5.5 per­cent by the end of 2019, it said.

In July, it said that the in­fla­tion could tem­po­rar­ily ex­ceed the pre­vi­ously tar­geted four per­cent next year due to the in­crease in the value-added tax (VAT) to 20 per­cent from 18 per­cent in 2019.

How­ever, the bank ex­pects that the quar­terly con­sumer price growth rate will draw close to four per­cent in the sec­ond half of 2019 and an­nual in­fla­tion will slow down to four per­cent in the first half of 2020 when the ef­fects of the ru­ble’s weak­en­ing and the VAT rise peter out, it said in the Fri­day’s state­ment. Bri­tish Steel has an­nounced it is to cut 400 jobs from its world­wide op­er­a­tions.

The com­pany, which em­ploys 5,000 peo­ple, said the job losses were part of a ‘stream­lin­ing’ process, BBC wrote.

Most of the re­dun­dan­cies will be in man­age­rial, pro­fes­sional and ad­min­is­tra­tive roles across its busi­nesses in the UK, Ire­land, France and the Nether­lands.

The Com­mu­nity trade union de­scribed the news as “a body-blow to the work­force”.

Roland Junck, Bri­tish Steel’s ex­ec­u­tive chair­man, said he was ‘sad’ to be mak­ing the an­nounce­ment.

“How­ever, it’s vi­tal our trans­for­ma­tion con­tin­ues so we can build a sus­tain­able fu­ture for the whole busi­ness, nearly 5,000 em­ploy­ees and many more peo­ple in the sup­ply chain,” he said.

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