Russian Ruble Hits 7 Weeks High

The Russian ruble rose to seven weeks high against the US dollar after the release of the monetary policy statement.

For the first time in a year, the Central Bank of Russia chose to cut key interest rates by 25 basis points at 7.50 percent.

In addition, the bank indicated that additional cuts in interest rates could be observed after the next monetary policy meetings.

The bank lowered inflation estimates as well as economic growth forecast to 1-1.5 percent from 1.2-1.7 percent.

[caption id="attachment_57057" align="aligncenter" width="488"] RUB/USD chart[/caption]

However, Russian Economy Minister Maxim Oreshkin said today that the central bank’s new inflation forecast of 4.2-4.7 percent 'seems too high.'

Meantime, the Russian ruble climbed more than 0.3 percent to record 64.39175 RUB after hitting a record high of 64.40177 RUB earlier in the trading session, the highest since April.

Since the beginning of the year, the Russian currency has gained more than 7 percent against the US currency.

In 2018, the European Union declared the extension of sanctions on Russia until February 2019. The sanctions contributed to the collapse of the Russian ruble and €100 billion worth of EU losses.