Key interest rate cut. What should financial departments consider?

Our quality control and methodology department informs you that the Bank of Russia has decided to cut the key interest rate by 50 basis points down to 7.75% per annum. The key rate value will remain at this new level at least from December 18, 2017 to February 11, 2018.

The press service of the Bank of Russia has published the reasons for this key interest rate cut. We note that the Bank of Russia has made this decision based on inflation figures, money and credit conditions, economic activity, and inflation risks.

The refinancing rate has been equal to the key rate since 2016.

Please note that the key rate (refinancing rate) is used to calculate:

  • Compensation for late payment of wages and other sums payable to employees (Article 236 Russian Labor Code);
  • Financial benefit gained by employees from savings on interest (Article212 Russian Tax Code
  • Penalties for non-payment of taxes (Article75 Russian Tax Code);
  • Interest for late tax refund (Article78 Russian Tax Code);
  • Interest for unlawful blocking or late unblocking of account (Article76 Russian Tax Code).

Key rate changes in 2017

March 27, 2017 — May 01, 2017
9.75%
May 02, 2017 — June 18, 2017 9.25%
June 19, 2017 — September 17, 2017 9.00%
September 18, 2017 — October 29, 2017 8.50%
October 30, 2017 — December 17, 2017 8.25%
December 18, 2017 — February 11, 2018 7.75%