Nabiullina explained the rate increase by the desire to slow down inflation

The decision of the Central Bank to raise the key rate to 8.5% is due to the need to tighten monetary policy in order to return inflation to 4%. About it stated Central Bank Chairman Elvira Nabiullina at a press conference following a meeting of the Board of Directors of the Bank of Russia.

“Given the changes in our assessment of the economic situation, a higher key rate trajectory will be required for us to end next year with inflation on target near 4%,” she said. Her words are quoted by the press service of the Central Bank.

Nabiullina drew attention to important changes in the economy, which required a tightening of the monetary policy. In particular, according to the chairman of the Central Bank, the recovery phase of economic growth has ended, consumer demand has begun to grow. In addition, inflation began to accelerate, the ruble weakened, and inflationary expectations of the population increased.

At the same time, Nabiullina did not rule out that the Central Bank may continue to increase the key rate in the near future in order to return inflation to 4%.

On July 21, at a meeting of the Board of Directors of the Central Bank, it was decided to raise the key rate by 1 percentage point at once. – up to 8.5%. This is the first increase since September 2022, when the Central Bank decided to lower the rate by 0.5 percentage points. – up to 7.5%. At this level, she kept six meetings in a row. The market basically did not expect such a decision by the Central Bank: the majority of economists polled by Vedomosti – 15 out of 21 – predicted an increase of 0.5 percentage points. Only three expected a stronger increase – up to 8.25-8.5%.