Bank of Russia raised key rate immediately by 3.5 percentage points to 12%

The Board of Directors of the Bank of Russia decided to raise the key rate by 3.5 percentage points at once. From August 15, 2023, the key rate is set at 12% per annum.

This decision was made to limit the risks to price stability, the regulator said in a release.

The next meeting of the Bank of Russia Directors Board, which will consider the issue of the key rate level, will be held on September 15, 2023, when it should have been maintained according to the schedule. This means that the regulator will look at the effect of today's increase and take the following actions.

Today's meeting is extraordinary. It was announced only on Monday evening. Experts are sure that the Central Bank forced the dollar to reach the psychologically critical level of 100 rubles to revise the rate ahead of schedule. During the day, the dollar rose even to 101 rubles. Euro exceeded the mark of 111 rubles. But after the evening announcement of the Central Bank, the exchange rate of the strongest currencies began to decline noticeably - in anticipation of the expected key rate increase.

The Central Bank did a similar maneuver in early March 2022. After February 24, a sharp acceleration of inflation began, and the dollar exchange rate reached 120. A sharp increase in the rate to 20% stopped inflation and dropped the dollar exchange rate by more than two times.