Central bank says raises key rate to 13% from 12%

MOSCOW, Sep 15 (PRIME) -- The board of directors of the Russian central bank has decided to raise the key rate to 13% annually from 12%, the authority said in a statement Friday.

"The inflation pressure in the Russian economy remains significant. Substantial pro-inflation risks, the growth of national demand exceeding the supply capacities and the weakening of the ruble during the summer months have fulfilled," the regulator said.

Annual inflation accelerated to 5.5% as of Monday from 4.3% in July and 5.2% in August. "The seasonally adjusted growth of prices amounted to 9% on the year over the last three months, the same base inflation figure grew to 8.4%," the regulator said. Inflation is expected to stand at 6–7% in 2023.

Inflation expectations of the companies increased strongly over the last few months, the expectations of the population grew as well. The expectations of the professional analysts grew for 2023 and 2024.

The credit activity remained strong in the corporate and retail segments in spite of the toughening of the conditions.

The economic activity continued to rise in a wide range of industries. High demand skewed the growth upper than the trajectory of a balanced increase. High import demand with decreasing exports was the key factor of the weakening of the ruble in 2023. The gross domestic product (GDP) is expected to rise 1.5–2.5% in 2023, 0.5–1.5% in 2024, 1–2% in 2025 and 1.5–2.5% in 2026.

The central bank said that it will decide on the key rate basing on the real and expected dynamics of inflation as compared with its goal, the process of economic restructuring, risks from the internal and external conditions, and the market reactions. The average key rate is forecasted at 13.0–13.6% in the period of September 18–December 31.

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