The Central Bank left the key rate at 7.5%
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At a scheduled meeting of the Board of Directors, the Bank of Russia decided leave the key rate at 7.5%. The Central Bank leaves this indicator unchanged for the third time. The last time the regulator lowered the key rate was in September.
The report of the Central Bank says that the dynamics of economic activity is better than the October forecast of the regulator. “Although the population is still cautious in consumer behavior, there are signs of a recovery in consumer activity,” the document says.
As noted by the Bank of Russia, despite the decline in inflationary expectations of the population and businesses, they still remain “at an elevated level”. Pro-inflationary risks increase the acceleration of the execution of budget expenditures, as well as the deterioration in the terms of foreign trade and the state of the labor market.
The regulator will make further decisions on the key rate, taking into account inflation dynamics. According to the forecast of the Central Bank, annual inflation will be 5.0-7.0% in 2023 and 4% in 2024.
According to the results of 2022, the regulator estimated the decline in GDP at 2.5%. According to the regulator’s forecast, the GDP growth rate will be -1-1% in 2023 and 0.5-2.5% in 2024. In 2025, the GDP indicator will grow by 1.5–2.5%.
According to the forecast of the Bank of Russia, in 2023 the average key rate will be in the range of 6.5-8.5%, in 2024 – 6-7%, in 2025 – 5.6%. First Deputy Chairman of the Central Bank Ksenia Yudaeva allowed change in the key rate forecast in 2023, taking into account several factors: oil and gas market conditions, the final budget and sanctions restrictions.
The government sought from the Central Bank to reduce the key rate, Bloomberg reported, citing sources familiar with the discussion of the issue. However, the press service of Prime Minister Mikhail Mishustin called this information is not true.
The next meeting of the Board of Directors of the Bank of Russia will be held on March 17.
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