The Central Bank allowed the increase in the key rate in September
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The key rate may be raised already at the next meeting of the Board of Directors, which will be held on September 15. About it informed Deputy Chairman of the Bank of Russia Alexei Zabotkin in an interview with the Izvestia newspaper.
“The lower limit of the forecast for the range of the key rate until the end of the year – 8.5% – allows for the possibility of the rate remaining unchanged. But <...> if the board of directors in the release admits the possibility of raising the rate at the next meetings, then it is likely that this will be done at the next one,” he said.
The rate will remain unchanged subject to the realization of “some kind of disinflationary risks” that are not observed today, Zabotkin explained. He added that all the indications point to “a high probability” that “more than just one July increase” will be needed.
On July 21, the Board of Directors of the Central Bank decided raise the key rate immediately by 1 p.p. – up to 8.5%. This is the first increase since September 2022, when the Central Bank lowered the rate by 0.5 percentage points to 7.5%. Chairman of the Central Bank Elvira Nabiullina explained raising the rate with the desire to return inflation to the level of 4%. At the same time, she allowed further rate hike.
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