Russian Central Bank Keeps Key Interest Rate at 4.25%

BY Dow Jones & Company, Inc. | ECONOMIC | 09/18/20 07:02 AM EDT By By Georgi Kantchev

Russia's central bank kept its key interest rate on hold at 4.25%, pausing a recent cutting cycle that saw rates fall to a record low as the coronavirus pandemic pushed the economy into a deep recession.

On Friday, the bank held its benchmark rate following a 0.25 percentage point cut in July to a post-Soviet low, as the ruble has recently fallen to multi-month lows against the dollar and inflation has strengthened.

The bank said in a statement that it would consider further cuts later at coming meetings.

The Russian economy has been pummeled hard by the virus. Russia recorded the fourth-highest number of Covid-19 infections in the world, with more than a million cases. Meanwhile, a tumble in oil prices earlier this year has hit industrial production and budget revenue, a third of which Russia derives from oil-and-gas sales.

The bank said Friday that the Russian economy has been slowly recovering from the twin shocks, but the upward path remains uneven.

"Recovery is the strongest in sectors focused on consumer demand," the bank said in a statement. "However, weak external demand remains a drag on economic activity. Once the first stage of economic recovery growth has petered out, the increase in economic activity will continue in a more gradual manner."

Write to Georgi Kantchev at

  (END) Dow Jones Newswires
  09-18-20 0702ET
  Copyright (c) 2020 Dow Jones & Company, Inc.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.