Bank of Russia raised key rate to 5.5%
For the second time in a row, the Central Bank raised its key rate by 0.5 percentage points. Now it is 5.5% per annum. Thus, it returned to the level of April-May last year.
The regulator pointed out the need to further increase the key rate.
“The Russian and global economies are recovering faster than previously expected. Inflation is higher than the forecast of the Bank of Russia,” the Central Bank said in a statement. “The contribution to inflation from stable factors increases due to the faster expansion of demand compared to the possibilities of increasing output. In the short term, this influence is amplified by the rise in prices on world commodity markets. Taking into account high inflationary expectations, the balance of risks has significantly shifted towards pro-inflationary ones ”.
The next meeting of the Board of Directors of the Bank of Russia, at which the issue of the key rate level will be considered, is scheduled for July 23, 2021.