The Bank of Russia sent to the State Duma an updated draft of the main directions of monetary policy for 2024-2026. The document takes into account the latest interest rate decisions and updated macro forecasts, as reported in the regulator’s press release. Document sent On the website of the Central Bank of the Russian Federation.
According to the document, with the influence of monetary policy, annual inflation will return to the 4 percent target in 2024 and will remain at this level from now on. Tight monetary policy will be needed for a long time to reduce inflation.
The Central Bank expects the interest rate to be 9.6-9.7% on average in 2023, 11.5-12.5% in 2024 and 7-8% in 2025. In 2026, this rate will be in the range of 5.5-6.5%, which is consistent with the long-term neutral rate forecast.
Additionally, the Central Bank presented alternative scenarios for economic development in the coming years. The “Increasing Fragmentation” scenario assumes that geopolitical tensions will increase and sanctions against Russia will be tightened.
Another scenario, “Risk”, implies that inflation in the world will remain at high levels and leading central banks will sharply tighten monetary policy. This could trigger a new global financial crisis.
One day before the 2024-2026 federal budget draft was announced is planning It will be submitted to the Duma on September 29.
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