The Bank of Russia kept its key rate at 7.5% for the sixth time. At the same time, the regulator does not rule out its increase at the next meeting, which will be held on July 21.
The Bank of Russia highlights the improvement in the consumer sentiment of citizens and the reactivation of consumer loans.
“In the context of a gradual increase in the current inflationary pressure, the Bank of Russia admits the possibility of raising the key rate in the next meetings to stabilize inflation near 4% in 2024 and beyond,” the central bank said in a statement.
As noted at the Central Bank, lending activity remained at a high level in both the corporate and retail segments. Mortgage lending accelerated at the expense of the market segment.
In the medium term, “the balance of risks has shifted towards pro-inflationary risks.” The regulator explains this trend by geopolitical instability, which affects foreign trade. In addition, the increase in pro-inflationary risks is associated with the situation of the labor market. The regulator warns that due to labor shortages, productivity growth could lag behind wage growth.
The current reference rate of 7.5% has been maintained since September 2022, before which it was raised six times in a row. The next board meeting is scheduled for July 21.
Author:
Natalia Gormaleva
Source: RB
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