Russia’s central bank on Friday cut interest rates for the first time since September 2022, in a sign that inflation pressures — not long ago described by President Vladimir Putin as “alarming” — are beginning to ease.

The Bank of Russia took rates down by 100 basis points to 20%. They had been held at 21% since last October, the highest level since the new benchmark rate was introduced in 2013.

The inflation rate in April was 6.2%, it said, down from an average 8.2% across the first quarter of 2025.

Russia’s full-scale invasion of Ukraine in February 2022 has put immense strain on prices, with a weaker ruble pushing up import prices, and on an economy it has had to re-orient through subsequent years of war.

This is a breaking news story and will be updated shortly.

SINGAPORE — Vincent Xue runs an online grocery retail business, offering fresh produce, canned food, packaged easy-to-cook ingredients to cost-conscious local consumers in Singapore.

Xue’s Nasdaq-listed Webuy Global sources primarily from suppliers in China. Since late last year, one third of his suppliers, saddled with excess inventory in China, have offered steep discounts of up to 70%.

“Chinese domestic markets are too competitive, some larger F&B manufacturers were struggling to destock their inventories as weak consumer demand drags,” he said in Mandarin, translated by CNBC.

Xue has also gotten busier this year after sealing a partnership with Chinese e-commerce platform Pinduoduo that has been making inroads into the Southeast Asian country.

“There will be about 5-6 containers loaded with Pinduoduo’s orders coming in every week,” Xue said, and Webuy Global will support the last-mile delivery to customers.

At a time when steep tariffs are deterring Chinese exports to the U.S., while domestic consumption remains a worry, overcapacity has led Chinese producer prices to stay in deflationary territory for more than two years. Consumer inflation has remained near zero.

Still, the country is doubling down on manufacturing, and this production overdrive is rippling through global markets, stirring anxiety in Asia that a flood of cheap imports could squeeze local industries, experts said.

“Every economy around the world is concerned about being swamped by Chinese exports … many of them [have] started to put up barriers to importing from China,” said Eswar Prasad, senior professor of trade policy and economics at Cornell University.

But for inflation-worn economies, economists say the influx of low-cost Chinese goods comes with a silver-lining: lower costs for consumers. That in turn could offer central banks some relief as they juggle lowering living costs while reviving growth on the back of rising trade tensions.

For markets with limited manufacturing bases, such as Australia, cheap Chinese imports could ease the cost-of-living crisis and help bring down inflationary pressure, said Nick Marro, principal economist at Economist Intelligence Unit.

Emerging growth risks and subdued inflation may pave the way for more rate cuts across Asia, according to Nomura, which expects central banks in the region to further decouple from the Fed and deliver additional easing.

The investment bank predicts Reserve Bank of India to deliver additional rate cuts of 100 basis points during rest of the year, central banks in Philippines and Thailand to cut rates by 75 basis points each, while Australia and Indonesia could lower rates by 50 basis points, and South Korea by a quarter-percentage-point.

In the late 1990s and early 2000s, the world economy experienced the so-called “China shock,” when a surge in cheap China-made imports helped keep inflation low while costing local manufacturing jobs.

A sequel of sorts appears to be under way as Beijing focuses on exports to offset the drag in domestic consumption.

Chinese exports to the ASEAN bloc rose 11.5% year on year in the first four months this year, as shipments to the U.S. shrank 2.5%, according to China’s official customs data. In April alone, China’s shipments to ASEAN surged 20.8%, as exports to U.S. plunged over 21% year on year.

These goods often arrive at a discount. Economists at Goldman Sachs estimate Chinese products imported by Japan in the past two years to have become about 15% cheaper compared to products from other countries.

India, Vietnam and Indonesia have imposed various protectionist measures to provide some relief for domestic producers from intense price competition, particularly in sectors facing overcapacity and cheap imports.

While for a large number of countries an influx of Chinese goods is a trade-off between lower inflation and the adverse impact on local production, countries such as Thailand could be facing a double-edged sword.

Thailand will likely be the hardest-hit by “China shock,” even sliding into a deflation this year, Nomura economists predict, while India, Indonesia and the Philippines will also see inflation falling below central banks’ targets.