The Central Bank of the Russian Federation increased the interest rate by 200 basis points to 15% annually at its board meeting on Friday. This should From the press release published on the Central Bank’s website.
“Current inflationary pressure has increased significantly and exceeds the expectations of the Bank of Russia. The steady increase in domestic demand increasingly exceeds the possibilities of expanding the production of goods and services. “Inflation expectations continue to remain at high levels,” he said.
BCS Forex analyst Anatoly Trifonov was elected named An increase in the key interest rate is expected. In his opinion, the prerequisites for such a decision were quite clear; In September-October, inflation remained at a high level and is approaching 7%, the upper limit of the Bank of Russia’s forecast corridor for this year.
In addition, the expert noted that with the new parameters of the 2024-2026 draft budget and the achievement of the 4 percent inflation target, it will be necessary to tighten monetary policy in 2024, as stated by the regulator himself. According to Trifonov’s forecasts, annual inflation will be 6.8% at the end of the year.
Trifonov believes that the increase in the interest rate will not have a significant impact on the ruble exchange rate now, but will contribute to its strengthening in the future. The analyst believes that the current increase in the interest rate will be the last increase this year and the Central Bank will start reducing interest rates in the second or third quarter of 2024.
This year’s key rate hike cycle began on July 21. The Central Bank increased it three times before this meeting. Dmitry Pyanov, First Deputy Chairman of the Board of Directors of VTB on Thursday statedThe importance of the Central Bank’s interest rate meeting can be compared to the Battle of Waterloo. The banker said that just as Waterloo determined the fate of Europe, the Central Bank’s meeting on October 27 will largely determine the development of Russian financial and banking markets in 2023-2024.
Previously “socialbites.ca” saidHow does the key rate affect the lives of Russians?
Source: Gazeta
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