(Finance) – The Russian central bank raises the interest rate more than expected by the market. The institution – citing the need to fight inflation – brought the cost of borrowing up to 8.5%, from the previous 7.50%.
The expectations of analysts were for a touch up to 8 percent.
“Current price growth rates, including a variety of underlying indicators, have exceeded 4% in annualized terms and are still rising,” the central bank underlines in a note. persistent inflationary pressure in the economy. Inflation expectations have risen. Developments in domestic demand and the depreciation of the ruble since the beginning of 2023 greatly amplify pro-inflationary risks”.
The Central Bank is keeping open the prospect of a further increase in the reference rate in the forthcoming meetings to stabilize the expected inflation which will fall to 4% in 2024, but which will settle at 5-6.5% in 2023.