In a surprising move, the Russian central bank has lowered its key interest rate for the sixth consecutive time, reducing it by half a percentage point to a new rate of 15.5%. This decision comes at a time when Russian businesses have been struggling with high interest rates and rising inflation, making the rate reduction a welcome relief. According to Bloomberg, this action is hoped to provide some financial relief to companies as they navigate these economic pressures.

Inflation in Russia is projected to rise to over six percent in January, significantly higher than the target inflation rate of four percent. The ongoing inflationary pressures add to the challenges faced by the economy, as previous growth rates have also diminished. Last year, the Russian economy saw only a one percent growth, a stark contrast to nearly five percent growth the previous year, indicating the struggles and potential tightening of economic conditions in the country.

The central bank's decision to lower the interest rate, while seemingly beneficial for businesses, poses implications for overall economic stability and inflation control. As inflation continues to rise, the central bank may face pressure to adjust its policies further to balance growth and stability in the Russian economy, which has been significantly impacted by both domestic and international challenges.