The Russian Central Bank increased its primary interest rate by two percentage points to 15% per annum, indicating a significant increase in inflationary pressure.
Friday’s press release from the Central Bank stated, “The Board of Directors of the Bank of Russia (the Central Bank) decided to raise the key interest rate by two percentage points, to 15.00% annually, and the current inflation pressure has increased significantly beyond the Bank of Russia’s expectations.”
According to the statement, “The steady increase in domestic demand increasingly exceeds the possibilities of expanding the production of goods and services, and according to the Central Bank, inflation expectations are still at high levels,” TASS reported.
The Bank of Russia indicated that future decisions on the key interest rate will be made in consideration of actual and anticipated inflation dynamics in light of economic development objectives for the foreseeable future, along with an evaluation of risks arising from internal and external conditions and financial market reactions.