The head of the Central Bank explained the maintenance of the level of the key rate by a moderate increase in prices

The head of the Bank of Russia, Elvira Nabiullina, explained why the regulator decided to keep the key rate at 7.5%. This is due to a moderate increase in current prices and subdued consumer demand. She announced this at a press conference of the Central Bank.

Ms. Nabiullina also highlighted a number of pro-inflationary factors that the Central Bank will take into account when conducting monetary policy. Among them are increased inflationary expectations, labor shortages in certain sectors, supply-side constraints, widening budget deficits, and worsening terms of trade.

The head of the Bank of Russia recalled that the goal of the regulator is to return inflation to the target by 2024. “We keep the forecast for the next year in the range of 5-7%,” added Ms. Nabiullina (quoted on the air of the Central Bank in YouTube).

Earlier today, on December 16, it became known that the Central Bank saved key rate at 7.5%. The Central Bank added that a further decision on the key rate will be made taking into account the dynamics of inflation and the restructuring of the economy.

After the entry of Russian troops into Ukraine, the Central Bank raised the key rate to a record 20%. Since April 8, against the backdrop of an improvement in the macroeconomic situation in the country, the regulator began to gradually reduce the rate. In September, Mrs. Nabiullina statedthat the Central Bank may soon complete the rate cut.

More details – in the material “The key rate remained unchanged”.

Erdni Kagaltynov