The Central Bank of the Russian Federation raised the key rate to a record 21% per annum.
This decision was made on October 25 at a meeting of the board of directors of the Central Bank of Russia, TUT NOVOSTI reports.
Why the Central Bank of the Russian Federation raised the key rate to a record high
The Central Bank of the Russian Federation's statement on raising the key rate notes that inflation is significantly higher than the July forecast.
Inflation expectations continue to grow. The growth of domestic demand significantly outpaces the possibility of expanding supply.
Additional budget expenditures and the associated increase in the budget deficit have pro-inflationary effects.
The Central Bank of the Russian Federation believes that in order to reduce inflation expectations and return inflation to the target, it is necessary to tighten monetary policy.
The Bank of Russia allows for the possibility of raising the key rate at the next meeting, the statement said.
According to the forecast of the Central Bank of the Russian Federation, the current monetary policy will help reduce annual inflation to 4.5-5% next year and to 4% in 2026.
