Federal State Statistics Service reported on Thursday that Russia’s inflation rate fell to 7.2% in July, down from 7.5% in June, hitting its lowest rate since March 2014.
Economists had expected a slight fall of the index on 7.4% but the larger-than-expected decline on Russian inflation opened the chances that the central bank will cut interest rates in September when it resumes its easing cycle in their next meeting.
The central bank is targeting to pull the inflation down at 4% by 2017 and is keeping their interest rates high to achieve that goal despite facing their recent economic debacle, leaving the rates unchanged at 10.50%
However, the ruble is up by 0.1%, to close at 66.20 per dollar.
The British pound dived by over 1.23%, to close at 1.3180 against US dollar on Thursday, following the historic decision of Bank of England to cut interest rate to 0.25%, the first rate cut in seven years.
The GBP/USD pair closed at 1.32 the previous day but was instantly affected by the BoE’s move to cut the bank rate by 25 basis points and expand its asset-purchase program from 375 billion pounds to 425 billion pound in order to achieve its 2% inflation target.
Meanwhile, the euro went also lower against the dollar as it closed at 1.114, -0.57% down from its previous market close of 1.12. The Japanese yen fell at 102.32, down from its previous close of 104.86.