Russia cuts key interest rate to help economy, but depriving ruble of support

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MOSCOW — Russia's central bank has cut a key interest rate, which it had hiked in previous months to support the ruble, in order to help the economy.

The ruble dropped 1.6 percent to 69.8 rubles against the dollar following the announcement.

Higher rates can help a currency but also hurt economic growth by making loans more expensive.

The bank raised the rate to 17 percent late last year in a last ditch attempt to curb the devaluation of the ruble which has lost more than half of its value.

The bank on Friday cut it back down to 15 percent, saying it views the risks of an economic slowdown are now higher than fears of a spiraling inflation.

Russia's economy has been battered by lower energy prices and Western sanctions.

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