The Central Bank of Russia announced on Thursday that it cut its policy rate by 300 basis points to 11% from 14%.

In its policy statement, the central bank noted that it holds open the prospect of additional rate reductions in its upcoming meetings.

Additional takeaways per Reuters

"Latest weekly data point to a significant slowdown in the current price growth rates."

"Funds continue to flow into fixed-term ruble deposits while lending activity remains weak."

"External conditions for the Russian economy are still challenging, considerably constraining economic activity."

"Financial stability risks decreased somewhat, enabling relaxation of some capital control measures."

"Annual inflation will decrease to 5-7% in 2023 and return to 4% in 2024."

Market reaction

With the initial reaction, the USD/RUB pair shot higher and was last seen rising 2.6% on the day at 60.9030.