Bank of Russia governor says rate cut 'possible'

Elvira Nabiullina told Bloomberg: “External conditions turned somewhat more volatile in recent weeks, and we will take into consideration all these factors, but we think that this option of a reduction is possible,” adding that recent data had confirmed “inflation is evolving tangibly better than we expected”.

Russia's central bank increased rates twice late last year, over concerns about mounting inflation and a weakening rouble. Nabiullina told Bloomberg that the bank was in no rush to unwind those increases.

She reiterated the possibility of a rate cut in a separate interview on Russian state television, noting: “Our board meeting is next week and we are considering different options, including a rate cut.”

It would be the first time in a year that the bank cuts interest rates.

Nabiullina’s comments, ahead of the decision on 14 June, coincided with the latest monthly meeting of policymakers at the European Central Bank. Faced with mounting concerns about weak inflation and wider worries about the global economy, it pledged to keep rates on hold at their current record lows until "at least" the middle of 2020, arguing that an “ample degree” of monetary stimulus was still needed.

As at 1430 BST the rouble was trading at 65.1071 against the dollar.