Russian Central Bank Holds Benchmark Interest Rate at 4.25%

By Georgi Kantchev

MOSCOW--The Russian central bank kept its key interest rate at a record low as a swift rise in coronavirus cases has clouded the economic outlook and volatility in the Russian ruble has increased ahead of the U.S. election.

The bank on Friday held its benchmark rate at 4.25%, following several cuts earlier this year that drove the rate to a post-Soviet low. It said in a statement that it would consider further cuts at upcoming meetings.

With the virus making a resurgence and cases hitting new records in Russia, analysts say that the outlook for the economy, which has already been badly bruised by earlier coronavirus lockdowns and low oil prices, has deteriorated.

Meanwhile, the Russian ruble has declined in recent months and remains unstable ahead of the Nov. 3 U.S. presidential vote amid investor concern about what its outcome would mean for relations with Moscow and the prospects of new economic sanctions.

"The outlook is uncertain," said Nikolay Markov, a Russia-focused economist at Pictet Asset Management. "It looks like the economic activity might deteriorate because of the second wave. At the same time, the U.S. election matters since depending on who wins, this could have a different impact on Russian assets."

Write to Georgi Kantchev at [e-mail]

Corrections & Amplifications

This article was corrected at 1636 GMT to clarify that the article was written by Georgi Kantchev not Ann M. Simmons.

(END) Dow Jones Newswires

10-23-20 0712ET