The Central Bank kept the key rate at 16% – Kommersant

The Bank of Russia kept the key rate at 16% per annum for the second time in a row. As the regulator noted, inflation pressure is gradually weakening, but remains high. The Central Bank also maintained the inflation forecast for 2024 at 4–4.5%.

“The return of inflation to the target in 2024 and its further stabilization around 4% imply a long period of maintaining tight monetary conditions in the economy,” the report notes. press release Central Bank.

The current price increase in February, according to the regulator, remained at the level of January; in March it is declining. The annual inflation rate was 7.7%. Inflation expectations of citizens and price expectations of enterprises continued to decline, the Central Bank noted.

The press release indicated that consumer activity remains high. The main limitation to expanding the production of goods and services remains the shortage of labor resources. Unemployment has reached a historic low.

The regulator noted that since the beginning of the year, the growth of corporate and mortgage lending has slowed. At the same time, in the retail segment there was an acceleration in unsecured consumer lending. The Central Bank added that the effects of previous key rate increases will continue to grow in the coming months.

Pro-inflationary risks, as reported by the Central Bank, remain. First of all, they are associated with changes in foreign trade, the persistence of high inflation expectations, the increasing deviation of the Russian economy upward from the trajectory of balanced growth, as well as the trajectory of normalization of fiscal policy.

In February, the Central Bank also kept the rate at 16% after raising it five times in a row. Last month, the regulator also for the first time published details of the discussion of the decision on the key rate. It said that the conditions for lowering the key rate will develop with a steady decline in inflation and the same level of decline in real interest rates. Most council members said they would appear in the second half of 2024.

About plans to reduce the rate in 2024 said and Deputy Chairman of the Central Bank Alexey Zabotkin. Central Bank Chairman Elvira Nabiullina announced plans to reduce the key rate as the inflation rate approaches 4%. In December, the Ministry of Finance predicted that by the end of 2024, inflation would be 4.5%. At the end of last year, inflation was 7.59%.

Read more about inflation in the world in the text of Kommersant. “Fear inflation – don’t cut rates”.