Nabiullina: the key rate may be increased by the end of the year

By the end of the year, the key rate may be increased, since the Bank of Russia intends to maintain a tight monetary policy (MCP) for several more quarters to return inflation to 4%. This was stated by the head of the Central Bank of the Russian Federation, Elvira Nabiullina, in the State Duma.

“To return inflation to the target at the end of 2024, we will have to maintain tight monetary policy for several quarters, the rate of lending growth will slow down, but I want to emphasize that next year, according to our forecast, lending rates will remain positive, that is will continue to contribute to the development of the economy,” Nabiullina said.

In the future, the regulator may begin to gradually reduce the key rate, subject to a steady decline in inflation. According to the Central Bank’s forecasts, inflation by the end of 2023 will be at the level of 7-7.5%. In 2024, a decrease to 4-4.5% is expected.

On October 27, the Bank of Russia announced another increase in the key rate from 13% to 15%. This was the fourth consecutive increase since the summer of 2023. Tightening of the monetary policy explained increased inflationary pressure and the need to achieve an inflation rate of 4% in 2024.

At the end of October Nabiullina saidthat the increase in the key rate of the Central Bank does not threaten a banking crisis in Russia: despite the slowdown, the growth of lending volumes remains positive. After the key rate increase, Russian banks raised rates for market mortgage programs. IN VTB since November the minimum rate is 16.4%, in Sberbank 15.6% per annum.