The Central Bank may once again raise the key rate if pro-inflationary risks increase
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The Bank of Russia (CB) announced that it would make further decisions on the key rate based on the dynamics of inflation and compliance with the target of 4%. Today, August 15, the regulator raised rate immediately by 3.5 percentage points, up to 12%.
The Central Bank said that the increase in the key rate is aimed at returning inflation to the target of 4% in 2024. This level of the rate, according to the regulator, “corresponds to the increase in sustainable inflationary pressure, the impact on it and inflation expectations from the dynamics of the exchange rate, as well as the balance of risks to stabilize inflation on targets in 2024.”
When making further decisions on the key rate, the Central Bank will proceed from the dynamics of inflation, economic restructuring, as well as risks “from internal and external conditions and the reaction of financial markets to them.” “In the event of an increase in pro-inflationary risks, an additional increase in the key rate is possible,” the press service said (quote from RIA Novosti).
The Central Bank held an extraordinary meeting after yesterday, August 14, the dollar exceeded 101 rubles, euro – 110 rubles, having updated the highs since March 2022. Against the backdrop of the decision of the regulator to raise the rate, the dollar has reached 97.52 rubles / $, the euro is trading at 106.52 rubles / €. According to the forecast of the Central Bank, annual inflation will continue to rise in the coming months.
About the situation with the ruble exchange rate – in the material “Kommersant” “August took the ruble”.
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