The Bank of Russia again decided to keep the key interest rate at 16% per year. Prior to this, the rate changed in December 2023, when the Central Bank decided to increase it from 15% to 16%.
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Arguing for the decision to keep the key interest rate at the same level, the regulator indicated that inflationary pressure remains high.
The message from the Central Bank indicates that the increase in domestic demand continues to exceed the possibility of increasing supply. In this sense, the regulator expects a slower return of inflation to the target than expected in February.
On February 16, following the results of the previous meeting on the key rate, the Bank of Russia emphasized that the return of inflation to the target in 2024 and its stabilization at around 4% implies a long period of maintaining strict monetary conditions .
Now, according to the regulator’s forecast, in 2024 inflation will fall to
“In March, current seasonally adjusted price growth fell to 4.5% annualized (after 6.3% in February). This drop was largely due to volatile components. “Sustained inflationary pressure has also decreased, but remains high due to active growth in domestic demand,” the Bank of Russia said in a statement.
The Central Bank also indicated that in March seasonally adjusted core inflation fell to 6.1% compared to 6.8% in February. However, the annual inflation rate has not changed significantly since the beginning of March. As of April 22, it is 7.8%.
Author:
Natalia Gormaleva
Source: RB
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