On Tuesday, the Bank of Russia reported that economic activity in the country slowed significantly at the end of September. However, he said that payments to mobilised troops should cushion the negative effect on consumer demand.
Notably, the central bank of Russia has been instrumental in limiting the economic fallout from the conflict in Ukraine and subsequent sanctions targeting Russia. The rouble had plunged to a record low against the dollar in March.
In February, an emergency rate hike to 20 per cent was followed by six cuts back to pre-crisis levels. However, the bank suggested its rate-cutting cycle may have ended last month when trimming to 7.5 per cent.
The central bank expects Russia’s economic contraction to bottom out in the first half of next year. The bank is likely to improve its 2022 full-year GDP forecast for a fall of 4-6 per cent. The bank still sees the neutral rate range at 5-6 per cent.
The Bank of Russia further said that as the conflict in Ukraine escalates and domestic pressure for a Russian victory intensifies, the focus on economic stability may hurt many.

Established in 1990, the Bank of Russia is the central bank of the Russian Federation. Headquartered in Moscow, its origin can be traced back to the State Bank of the Russian Empire, founded in 1860.