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Russia's Central Bank cuts refinancing rate from 11.5% to 11%

MOSCOW, October 20 (RIA Novosti) - Russia's Central Bank said Friday it reduced its refinancing rate from 11.5% to 11%.

The decision, made by the CBR board of directors, will come into effect October 23, 2006.

The CBR cut the refinancing rate from 13% to 12% at the end of 2005, and to 11.5% in June 2006, to reduce borrowing costs and make loans more affordable.

The issue is crucial for the success of a major socially oriented program, outlined by President Vladimir Putin in September 2005 in a bid to improve the quality of life of Russians, a goal which has been given priority for the first time in post-Soviet Russia.

The program comprises four so-called national priority projects: Comfortable and Affordable Housing, Development of the Agricultural-Industrial Complex, Health, and Education.

CBR First Deputy Chairman Alexei Ulyukayev said earlier that the Central Bank could cut the refinancing rate considerably if inflation does not exceed 9% in Russia in 2006.