The board of directors of the Bank of Russia decided to immediately increase the key interest rate by 200 basis points (bp), from 13 to 15% per year, the regulator reported in a statement.
The Central Bank explained the decision by the increase in inflationary pressure: “it is higher than the expectations of the Bank of Russia.” Domestic demand increasingly exceeds the possibilities of expanding the production of goods and services, and credit growth rates remain high, the regulator reports.
The Bank of Russia also updated its forecast, according to which by the end of 2023 annual inflation will be in the range
On September 15, the Central Bank decided to increase the key rate to 13% annually and noted that the return of inflation to 4% by 2024 implies a long period of maintaining strict monetary conditions in the economy.
The Finam financial group predicted three scenarios for the development of events at the meeting on October 27: maintaining the reference rate at 13%, increasing it to 14% and increasing it above 14%.
Olga Belenkaya, head of the macroeconomic analysis department at Finam, described as probable “an increase in the interest rate to 14%, while maintaining the signal that the Bank of Russia will continue to evaluate the feasibility of further increasing the interest rate in the next meetings.” .”
Earlier, VTB Vice President and Chairman of the Board of Directors Dmitry Pyanov compared the meeting of the Bank of Russia’s board of directors on key rate issues to the Battle of Waterloo.
Author:
Anastasia Marina
Source: RB
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