On Friday, the Central Bank of Russia cut its key interest rate by 150 basis points to 9.5%.
Although acknowledging that the external environment for the Russian economy remains challenging and significantly restrains economic activity, the central bank's board said in a statement that "inflation is slowing faster and the decline in economic activity is of a smaller magnitude"
According to recent data, price growth has been low in May and June. The tailing off of the surge in consumer demand in the context of a marked decline in inflation expectations of households and businesses is what led to this.
The rate was raised from 9.5% to 20% in late February after Russia invaded Ukraine. At an extraordinary meeting in May, it was reduced from 18% to 11%.
Russian inflation slowed to an annual 17.1% in May from 17.83% in April, indicating that the inflationary shock from the war in Ukraine may have peaked.
The ruble rebounded from historic lows against the dollar after the invasion to become the world's best-performing currency.
The currency appreciated against the dollar after the decision was made. The ruble was close to the dollar.
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The economic transformation process has been implemented in an effort to mitigate the long-term damage from Western sanctions.
Russia's annual inflation is expected to fall to between 5 and 7 percent in the years to come.
The Bank of Russia assumed that there would be a decrease in economic activity in the second quarter of the year. The Bank of Russia believes that the GDP decline could be lower than expected.
There will be a rate decision meeting on July 22.
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