Russia's economy minister predicts new interest rate cut as economy stabilizes

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MOSCOW — Russian Economic Development Minister Alexei Ulyukaev says that the country's central bank could cut interest rates next month as the economy stabilizes.

The Bank of Russia raised its key interest rate sharply to 17 percent in December when the ruble crashed to record lows against the dollar, but has since cut it for two months in succession as the ruble recovers some lost value.

In reducing the rate by one point to 14 percent earlier this month, the bank said the risk of inflation prevented a further cut.

Ulyukaev was quoted in Russian media as saying that the rate "may be lowered and colleagues from the Bank of Russia think likewise."

The central bank predicts Russia's economy will contract by between 3.5 and 4 percent this year.

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