Russia Fights inflation by increasing interest rates

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Inflation
Inflation

Russia’s central bank raised the key interest rate by 100 basis points to 16 percent amid high inflationary pressures, the bank said in a statement Friday.

It said that annual inflation exceeded initial forecasts, and is expected to be close to the upper bound of the 7-7.5 percent range by the end of 2023.

“At the same time, the Bank of Russia expects GDP (gross domestic product) growth in 2023 to outperform its October forecast and exceed 3 percent,” said the statement.

The bank noted that a “return of inflation to target in 2024 and its further stabilization close to 4 percent” would mean that “tight monetary conditions will be maintained in the economy for a long period.”

The next key interest rate meeting will be held next year on Feb. 16, the bank said.

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