The Central Bank of the Russian Federation increased the key interest rate by 100 basis points for the fifth consecutive time to 16% annually at its board meeting on December 15. In this respect says in a press release published on the regulator’s website.
“Current inflation pressures remain high. By the end of 2023, annual inflation is expected to be close to the upper limit of the forecast range of 7.0-7.5%. At the same time, according to the Central Bank of Russia, GDP growth in 2023 will be higher than the October forecast and will exceed 3%. “This means that the upward deviation of the Russian economy from the balanced growth trajectory in the second half of 2023 is more pronounced than the Bank of Russia had predicted in October.”
The financial market demanded an increase in the interest rate to 16 percent in the baseline scenario.
Mikhail Vasiliev, chief analyst of Sovcombank, explained to socialbites.ca that, first of all, the regulator considers the level of inflation when deciding on the rate, and the rate of price growth is already higher than the Central Bank’s forecast. 7-7.5% at the end of the year.
“Analysts expect inflation to be 7.6% at the end of the year, and we expect the price increase to rise to 7.8%,” Vasiliev said.
In addition, pro-inflationary factors have increased, including increasing staff shortages, and unemployment has reached its lowest level in history, he added. Inflation expectations of the population are also increasing, risks related to the weakening of the ruble exchange rate remain, and the lending rate is slowing down. Vasiliev announced that the price of the ruble against the dollar has fallen by 32% since the beginning of the year.
More details material “Newspapers.Ru”.
Previously “socialbites.ca” said How does the key interest rate of the Central Bank of the Russian Federation affect the lives of Russians?