Current inflation pressures remain high. Annual inflation by the end of 2024 is likely to exceed the July forecast range of 6.5-7.0%.
Due to the huge inflationary pressure, the Bank of Russia increased the key rate from 18 to 19% per annum. This is the second increase in recent months, Radio Liberty reports.
“Current inflation pressures remain high. Annual inflation at the end of 2024 is likely to exceed the July forecast range of 6.5-7.0%,” the central bank’s board of directors said in a statement.
It was noted that “further tightening of monetary policy is necessary to reduce inflation expectations.”
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The main (base) interest rate is the lowest interest rate at which the Bank of Russia issues loans to commercial banks. Accordingly, an increase in the prime rate leads to an increase in the cost of loans. High lending rates slow down economic growth and purchasing power, so inflation should come down.
It was earlier reported that the Russian central bank raised the key rate for the first time in seven months.
We remind you that in 2022 the Bank of Russia received a loss of 721.7 billion rubles, which is 27 times more than the loss calculated in 2021 (26.3 billion rubles).
Source: korrespondent
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