“The Bank of Russia’s board of directors on October 30, 2015, made the decision to leave the annual key interest rate at 11 percent, taking into account the existence of considerable inflationary risks and risks of a cooling economy that did not occur,” the press release reads.
Russia's economy has deteriorated since 2014 due to a decrease in oil prices and geopolitical tensions arising amid the crisis in Ukraine. At the end of 2014, the demand for foreign currency in Russia increased because of a weakening ruble.
In January 2015, the Russian government released an anti-crisis plan to stabilize the economy by 2017. After three months, the Russian national currency began to strengthen against the dollar and the euro.
Amid economic hardship, the Bank of Russia has had to consider multiple tasks including economic growth stimulation, which requires a rate reduction. The bank must also counter inflation, and plans to ease monetary policy.
The Central Bank made a decision on the key interest rate in September, moving to 11 percent. Since that time, annual inflation fell from 15.7 to 15.5 percent, and the dollar fell almost six percent to the ruble.
