The Central Bank raised the key rate to 8.5% – Kommersant
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Board of Directors of the Bank of Russia following a scheduled meeting raised key rate to 8.5%. Previously, it was at the level of 7.5% per annum, the indicator has not changed since September 2022.
The rate has been raised by 100 basis points. The market expected a more modest move – by 50 basis points. According to the forecast (.pdf) of the Bank of Russia, taking into account the ongoing monetary policy, annual inflation will be 5.0–6.5% in 2023 and return to 4% in 2024. The Central Bank noted that it allows the possibility of a further increase in the rate during the next meetings to stabilize inflation near 4% in 2024.
The Central Bank statement also says that the increase in domestic demand exceeds the possibility of expanding production, including due to limited free labor resources. This increases the steady inflationary pressure in the economy, the Central Bank explained.
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