Putin Signals Rate Cut as Central Bank Chief Is Ill

Vladimir Putin told senior officials Wednesday that the central bank has grounds to cut its key interest rate when it meets next week. He praised the policy of governor Elvira Nabiullina, who was absent from the meeting because of illness.

Putin rarely comments on specific rate decisions. His remarks before the central bank's scheduled announcement shift expectations toward a cut. The bank's board will decide next Friday.

A rate cut would reverse a period of tight monetary policy. The central bank has kept rates high to fight inflation. Lower rates would ease borrowing costs for businesses and households, supporting growth. The risk is a rebound in price pressures.

Nabiullina has led the central bank since 2013 and is associated with its inflation-fighting credibility. Her absence means the decision will be made without her.

The ruble has been supported by high yields. A cut would narrow that advantage. The currency could weaken if foreign investors reduce their exposure.

The central bank will announce its decision next Friday. Nabiullina's condition and return date have not been disclosed.