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Business

Russia lowers interest rate for fourth time in 2017

Russia's central bank has cut its key interest rate again as inflation hits a record low. The nation is struggling to pick up speed after a drawn-out recession, with a lack of structural reforms making recovery volatile.

Russia's central bank announced Friday it had cut its key interest rate to 8.5 percent, marking the fourth reduction this year amid low inflation.

The lender said it took the decision to slice 50 points off the rate after "inflation expectations resumed their decline."

In a statement, the bank noted it would continue to conduct a moderately tight monetary policy in order to maintain inflation close to 4 percent.

Watch video 02:28

Russian business climate improves as ruble stabilizes

Economy growing again

The central bank is still struggling to breathe life in the Russian economy as it slowly emerges from the longest recession under President Vladimir Putin, caused not least by low oil prices and Western sanctions over its perceived role in the Ukraine conflict.

The lender dramatically increased its interest rates following the crash of the ruble in late 2014 and has been gradually chipping away at the key rate since then in a bid to bolster the economy.

Russia's gross domestic product (GDP) is expected to expand by between 1.7 percent and 2.2 percent this year, according to central bank estimates.

The lender warned, though, that the national economy required serious structural reforms to grow more strongly in the future.

Watch video 01:04

Russia's economy recovering

hg/tr (AFP, Reuters)

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