The Bank of Russia raised its inflation forecast for 2023 to 6-7% from 5-6.5%, but expects it to return to 4% in 2024.
The Board of Directors of the Bank of Russia on Friday, September 15, decided to increase the main rate by 100 basis points – to 13% per year. This was reported by the press service of the regulator.
“Inflationary pressure on the Russian economy remains high. Significant pro-inflationary risks have occurred: growth in domestic demand, exceeding possibilities for output expansion, and weakening of the ruble in the summer months. In these conditions, it is necessary to ensure further strengthening of fiscal conditions to limit the scale of deviation of inflation upwards from the target and its return to 4% in 2024,” the report said.
The Central Bank of the Russian Federation raised its inflation forecast for 2023 to 6-7% from 5-6.5%, but expects it to return to around 4% next year.
The regulator noted that the return of inflation to the target and its further stabilization at around 4% “also provides long-term support for tight monetary conditions in the economy.”
The Bank of Russia will examine the feasibility of further raising the key rate at its upcoming meetings.
We remind you that on August 15, the Central Bank of the Russian Federation raised the key rate by 350 basis points – to 12% per annum. This decision was made to limit the risks of price stability.
As you know, on August 14, the official exchange rate of the Russian currency exceeded 101 rubles per dollar, while the euro was worth more than 111 rubles. The weakening of the Russian currency has been going on for more than a year. In the past, the fall of the ruble was sharp, but short-lived.
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