The Central Bank has cut its refinancing rate to 170 percent from 185 percent, effective immediately, a Central Bank spokeswoman said Wednesday. It was the fourth Central Bank rate cut in just under two months. The rate was 210 percent until the end of April. "The reduction of the refinancing rate was made possible by falling interbank credit rates," the spokeswoman said. "Yields fell to 159 percent at Tuesday's auction for three-month treasury bills -- another indicator that rates can fall." The Central Bank chairman, Viktor Gerashchenko, has said that the refinancing rate could fall to 110 percent by the end of the year if monthly inflation remains low. According to the State Statistics Committee, monthly inflation was 8.1 percent in May, down from 9.7 percent in April and 22 percent in January. Russian bankers have said the Central Bank's rate has little or no influence on treasury bill yields or on interest rates that commercial banks offer each other through the interbank credit market.
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