The Central Bank raised the key rate by 0.25 percentage points – up to 6.75 percent per annum, the message on the regulator’s website. The increase was fifth since March, similar solutions were taken at all subsequent meetings.
The current value was the highest since November 2019, when the key rate was reduced to 6.5 percent as part of the planned policy of the Central Bank of Mitigation of Monetary Conditions. Subsequently, the regulator continued to reduce the main landmark for the economy under the influence of the crisis caused by the COVID-19 pandemic. From July 2020 to March 2021, a key rate was at the lowest level in the Russian history – 4.25 percent per annum.
However, as the economy restorivates from the consequences of the decline, state bodies began to record the growth of inflation rates, which demanded the reaction of the Central Bank, and the regulator began to tighten the policy, raising the rate.
At the previous meeting, on July 23, the Central Bank raised a bet on one percentage point, explaining the decision to the fact that the Russian economy in the second quarter of 2021 reached an additional daily level. This was facilitated by expanding demand “compared to the possibilities of exhausting.” At a press conference after a meeting of the Board of Directors, the head of the Central Bank Elvira Nabiullina said that the new raising raising “is not excluded, but not predetermined.”
At the preceding meeting of the Board of Directors of the Central Bank of the Central Bank, most economists predicted an increase in key bet. Many of them converged that the increase range will be 0.25-0.5 percent. Some of them assumed that the increase could occur in two steps until the end of the year.
Analysts of the Eurasian Development Bank (EDBR) also predicted raising rates by 0.5 percentage points, noting that the inflationary pressure on the economy remains elevated. Inflation in annual terms as of August 30 reached 6.8 percent. The offer is still limited by global deliveries and increased costs of manufacturers. In turn, demand is supported by improving consumer spending.