The Russian Central Bank said on Thursday that it is lowering its benchmark interest rate by 25 basis points to 8%, to become effective on April 30, making this the 13th rate reduction since April last year.

Cutting interest rates has been used as a weapon to help recovery in the Russian economy, by making lending cheaper, and by hindering rouble appreciation, thus helping Russian exports. The move was widely expected by most economists, and hence it proved no surprise to the markets. However, the announcement saw the rouble climbing higher against most currencies, with further upside potential expected, as most analysts believe that this was probably the last reduction in interest rates in the chain since last year. 

The Central Bank, in its statement, cautioned against a potential rise in the inflation figure towards the end of the year. This comment, coupled by the fact that there has been an increase in demand for rouble denominated bonds, could help the rouble's upward trajectory even further.

USDRUB fell from around 29.4050 to around 29.2210, after the announcement was made. The pair could find some support around 29.1800, whereas a drop below 29.0700 could open the way for more losses with a next support level around 28.9085, the lowest since April 15. On the upside, a break above 29.4065 could lead to gains and a first resistance around 29.4520 and 29.5480 in extension.