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The bank, acting on a slowdown in inflation,
cut the key rate to 7.50% from 7.75%, the level it was at before
the previous rate increase in December.
"(The) annual inflation slowdown is continuing... Economic
growth in the first half of 2019 is lower than the Bank of
Russia's expectations," the central bank said in a statement,
explaining the move.
The central bank said more rate cuts were likely in the next few
months.
"If the situation develops in line with the baseline forecast,
the Bank of Russia admits the possibility of further key rate
reduction at one of the upcoming Board of Directors' meetings
and a transition to neutral monetary policy until mid-2020."
The bank, which hiked the key rate twice last year to rein in
rising consumer prices, said inflation, its main remit, was on
track to slow towards the 4% target quicker than previously
expected.
The central bank acted in line with a recommendation of the
International Monetary Fund which said in late May that it was
time to cut rates.
The bank said annual inflation reached 5% as of June 10, down
from 5.1% in May. The rouble firmed to 64.35 versus the U.S.
dollar from a level of 64.42 seen shortly before the central
bank's decision. Elvira Nabiullina, governor of the central
bank, will elaborate on the central bank's monetary policy at a
news conference at 1200 GMT. The next rate-setting meeting is
scheduled for July 26.
(Reporting by Andrey Ostroukh, Elena Fabrichnaya, Maria
Kiselyova; Writing by Gabrielle Tétrault-Farber and Andrey
Ostroukh; Editing by Christian Lowe)
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