Central Bank reacts to inflation: key rate increased to 6.5%

Today, for the first time since 2014, the Bank of Russia raised its key rate to 6.5% - by 100 points at once. This is how the Central Bank reacts to the acceleration of inflation: “The contribution to inflation from the side of stable factors has increased due to the faster expansion of demand compared to the possibilities of increasing production. Taking into account high inflationary expectations, this has significantly shifted the balance of inflation risks towards pro-inflationary ones and may lead to a longer deviation of inflation upward from the target,” the Central Bank said in a release.

The new Central Bank forecast for annual inflation in 2021 is 5.7-6.2%.