The head of the Central Bank Nabiullina announced the imminent completion of the rate increase cycle

Chairman of the Bank of Russia Elvira Nabiullina said that the regulator is close to completing the rate increase cycle. At the same time, it will remain high “for as long as it takes.”

“Based on our base case, yes, we are probably really close to the end of the rate hike cycle. But in many respects, everything will depend on the situation, what will happen to the stable components of inflation,” Ms. Nabiullina said at a press conference following a meeting of the Board of Directors of the Central Bank.

She added that the regulator will make specific decisions on changing the rate level based on incoming new data and clarification of forecasts. The Bank of Russia, according to her, will set the key rate in such a way as to return inflation to the target of 4% at the end of next year.

Inflation in Russia remains high, but the ruble exchange rate affects it less, the chairman of the Central Bank said. The country’s economy, according to Elvira Nabiullina, cannot keep up with growing demand, as it has deviated from its potential – it is determined by labor resources and technology.

Today, the Central Bank raised the key rate for the fifth time in a row by 100 basis points (bp) – from 15% to 16% per annum. The regulator explained the decision by high inflation pressure. The regulator also updated its economic forecast. According to new estimates, GDP growth by the end of 2023 will exceed the October forecast and will be more than 3%. Inflation at the end of the year will be 7-7.5%, in 2024 – 4-4.5%.

About the new rate increase – in the Kommersant publication “The rate grows with the economy”.

Petr Buzlaev