Russia slashes interest rates to cool rouble rally

MOSCOW has slashed interest rates back to pre-invasion levels as officials try to weaken the rouble.

The Central Bank of Russia (CBR) cut its benchmark borrowing rate by 1.5 percentage points to 9.5pc, and signalled that further reductions may be coming.

Officials have now fully reversed an emergency increase to 20pc intended to tame inflation in the early weeks of the Ukraine war.

Inflation in Russia slowed during May to 17.1pc, from the two-decade high of 17.8pc reached in April. The CBR predicted inflation would average between 14pc and 17pc this year.

Softening the rouble and stimulating Russia’s sanction-struck economy is now a priority for the Kremlin, which is facing the biggest GDP slowdown of any developed country this year.

The rouble is currently trading near a four-year high at 58 to the dollar.