Russia Lowers Interest Rate
MOSCOW (AP) _ Russia’s Central Bank lowered a key interest rate on Monday in the belief that the country’s markets had survived the trauma brought on by the Asian financial crisis.
The bank had raised the rates three times since the start of worldwide market instability in November. The government was seeking to defend the ruble as investors fled from the currency and unloaded bond holdings.
But in recent weeks, pressure on the ruble has eased and yields on government bonds have fallen to around 33 percent from levels above 40 percent last month.
Citing these factors, the bank on Monday cut its benchmark refinancing rate to 39 percent from 42 percent. Government and central bank officials have said they expect interest rates to continue falling in the coming months and are targeting a level of 16 percent to 19 percent for the refinancing rate by year-end.