16.09.201606:54:00UTC+00Russia Cuts Key Rate By 50 Bps As Expected

Russia's central bank lowered its key interest rate by 50 basis points as expected to underpin growth amid slowing inflation.

The Board of Directors on Friday decided to reduce the benchmark rate to 10.00 percent from 10.50 percent. The bank last lowered the rate by 50 basis points in June.

The bank noted that inflation eased in line with the baseline forecast. Inflation is forecast to slow further to around 4.5 percent in September 2017 before hitting the 4 percent target by late 2017.

The expects that the interest rate at its current level will bring down inflation expectations.

The bank said the revival in production activity is still unstable and patchy across industries. More time is needed for positive trends to develop and get rooted, the bank added.

Positive quarterly GDP growth is possible in the second half of this year, however in 2017, GDP growth will not be high, staying below 1 percent, the bank said.