The Central Bank of Russia announced on Friday that it raised its monetary policy rate by 25 basis points to 6.75% from 6.5%. The market consensus was for a rise of 50 basis points. The ruble was not affected by the decision. USD / RUB was holding below 73.00.
“Given the monetary policy stance, annual inflation will drop to 4.0-4.5% in 2022 and will remain close to 4% thereafter,” the central bank said. He added that “key decisions on rates will take into account the real and expected inflation dynamics in relation to the objective and economic evolution over the forecast horizon, as well as the risks posed by internal and external conditions and the reaction of financial markets. . ” They estimate that inflation will start to slow down in the last quarter of 2021.
Regarding the future, the monetary authority indicated that if the situation develops according to the reference forecasts, keeps the prospect of new interest rate hikes open in its next meetings. “The monetary policy stance of the Bank of Russia aims to limit this risk and bring inflation back to 4%,” the Russian central bank said.
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