Cbank raises key rate by 1 pp to 16%, highest level since Apr 2022

MOSCOW, Dec 15 (PRIME) -- Russia’s central bank has raised its key rate by 1 percentage point to 16% annually, the highest since April 2022, the regulator said in a statement on Friday.

“The current inflationary pressure remains high. In 2023, annual inflation is expected to stay close to the upper range of the forecast of 7.0–7.5%. The Bank of Russia expects the growth of GDP (gross domestic product) to outperform the October forecast and exceed 3%. This means that the upward deviation from the Russian economy from the balanced growth trajectory was more significant in the second half of 2023 than the regulator expected,” the statement read.

Some segments of the lending market showed signs of a slowdown, but lending is still rising fast, and inflationary expectations of people and the pricing expectations of companies increased. The regulator has to maintain a longer period of tough monetary conditions in the economy if it wants to reduce inflation to the 4% target in 2024 and maintain it, the authority said.

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