(Adds c.bank comment, detail, rouble reaction)
* Russian c.bank cuts key rate to 6.25% from 6.50%
* Cites lower inflation
* Rouble steady vs dollar after rate cut
MOSCOW, Dec 13 (Reuters) - The Russian central bank lowered its key interest rate to 6.25% on Friday, cutting the cost of lending for the fifth time this year, and said it would consider the need for further reductions in the first half of 2020 because of slowing inflation.
The cut was in line with market expectations. In a Reuters poll earlier this month, most analysts predicted the central bank would trim the rate by 25 basis points.
“If the situation develops in line with the baseline forecast, the Bank of Russia will consider the necessity of further key rate reduction in the first half of 2020,” the central bank said in a statement.
The central bank cut the key rate because inflation, a key indicator it strives to keep under control, slowed to 3.4% as of Dec. 9, having slid below its 4% target several weeks ago.
“(The) annual inflation slowdown paves the way for a future decline in inflation expectations of households and businesses,” the central bank said.
The cut brought the key rate closer to the lower boundary of the 6% to 7% range that the central bank considers neutral from a monetary policy point of view.
The rouble largely ignored the rate move, remaining stable at 62.39 versus the dollar, its strongest level since July 2018.
The central bank also revised its inflation forecasts. It said it now saw inflation at 2.9-3.2% as of the year-end, bottoming out at below 3% in the first quarter of 2020.
Economic growth in Russia is seen near the upper boundary of the 0.8-1.3% forecast range in 2019 before picking up to 2-3% in 2022, the central bank said.
Elvira Nabiullina, governor of the central bank, will shed more light on the central bank’s forecasts and monetary policy plans at a news conference at 1200 GMT.
The next rate-setting meeting on Feb. 7 will also be followed by a Nabiullina news conference. (Reporting by Andrey Ostroukh, Gabrielle Tétrault-Farber, Elena Fabrichnaya Editing by Andrew Osborn)
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December 13, 2019 at 05:48PM
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UPDATE 1-Russia lowers key rate to 6.25%, says more cuts possible in 2020 - Reuters
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