Possible increase in key rate if inflation rises - Central Bank

The Bank of Russia gave an additional commentary on the decision on the key rate, allowing its further increase. The release sent to the federal media reads:

“The Bank of Russia will make further decisions on the key rate based on the extent to which the actual and expected inflation dynamics relative to the target, the process of economic restructuring, as well as risks from internal and external conditions and the reaction of financial markets to them, will be able to further increase the risk upward deviations of inflation from the target near 4% in 2024. And in the event of increased inflationary risks, an additional increase in the key rate is possible.”

This statement was released sometime after announcing a key rate increase to 12% when it became clear that the rates of the leading currencies did not react to this news. However, they began to decline on Monday evening after the announcement of an extraordinary meeting of the Board of Directors of the Central Bank.

The next meeting on the key rate will be held on September 15.

Recall that on July 21, the regulator raised the rate by 1 p.p. up to 8.5%. The key rate of 7.5% was kept for 10 months.