Central Bank left key rate at 16% per annum

The regulator's press service reports that the Bank of Russia kept the key rate at 16% per annum for the second time. The regulator notes in a release that the return of inflation to the target of 4% implies a long period of maintaining tight monetary conditions in the economy.

“The current seasonally adjusted price growth in February remained at the level of January, and in March, according to preliminary data, it is decreasing. Although monetary conditions continue tightening, domestic solid demand keeps inflation pressures elevated. Inflation expectations of the population and price expectations of enterprises continued to decline. However, they remain at elevated levels. This determines the inertia of the current increased price growth.

Current indicators indicate that the Russian economy will continue to grow rapidly in the first quarter of 2024. Consumer activity remains high amid significant growth in household incomes and confident consumer sentiment. Data from enterprise surveys indicate continued high investment demand. The upward deviation of the Russian economy from the balanced growth trajectory remains significant,” Central Bank analysts point out.

The Bank of Russia will publish a summary of the Board of Directors discussion of the key rate on April 1. The next meeting on the key rate issue will be on April 26.

Author: Elina Akhmetova