The recovery in Russia and its related exchange traded fund (ETF) has been slow going, but the Central Bank has stepped in to give the economy a much-needed jump start.
In an attempt to spur bank lending and limit inflows of short-term foreign capital, Russia’s Central Bank reduced its benchmark refinancing rate by 0.25% to 8.5% and reduced the repo rate to 7.5%, reports Polya Lesova for MarketWatch. Consumer price inflation dropped to 8% in January and is expected to further decline. [Things Going for Russia.]
The Russian economy is estimated to grow around 3.5% this year. The manufacturing sector and consumer demand both remain below pre-crisis levels.
It’s believed that the Central Bank has intervened in the currency markets to slow the ruble’s advance, which has strengthened beyond its 35.0 level against the dollar/euro currency basket.