The Bank of Russia kept the key interest rate at 16% per year

Before this, the key rate was increased five times in a row. In a meeting held on December 15, the Central Bank decided to increase the key interest rate by 100 basis points. p.- from 15 to 16% annually.

The Central Bank’s message indicates that the current inflationary pressure has decreased compared to the autumn months, but remains high. “Domestic demand continues to significantly exceed the possibilities of expanding the production of goods and services. It is premature to judge the sustainability of emerging disinflationary trends,” warns the Bank of Russia.

The regulator once again recalled that the return of inflation to the target in 2024 and its stabilization around 4% implies a long period of maintaining strict monetary conditions in the economy.

On average, between December and January, current seasonally adjusted price growth fell to 6.6% annualized (compared to 11.5% in the fall months). Core inflation fell to 7% annualized (10.2% in the autumn months). The decision to tighten monetary policy largely led to these results, the regulator notes.

Olga Belenkaya, head of the macroeconomic analysis department at Finam Financial Group, believes that the noticeable slowdown in inflation (in SAAR terms it decreased from about 11% in the fall to 6.5% in December) is not a reason to increase the rate clue. . At the same time, the analyst points out, “the management of the Central Bank is giving clear signals that there is still no talk of reduction.”

The next meeting of the Central Bank, at which the issue of the level of the key rate will be considered, will take place on March 22, 2024.