The Bank of Russia kept the interest rate at the same level, but in the accompanying statement made clear its course for further tightening of monetary policy. As noted release The regulator allows the possibility to increase the key rate at the next meeting.
This direct signal contrasts with the more vague language of previous months. As a matter of fact, in March, the Central Bank did not make a clear statement regarding interest rates in April, but only pointed out that tight conditions should be applied for a long time in order for inflation to slow down.
The following statement in the June statement seems even harsher: “Returning inflation to target will require a much longer period of economic control than anticipated in April.” The Central Bank explains that the increase in domestic demand continues to significantly outpace the possibilities of expanding the supply of goods and services.
According to the Central Bank, the current price increase rate has stopped decreasing and remained close to the levels of the first quarter of 2024. Annual inflation was estimated to be 8.1% in April, after 7.8% in March. The regulator expects to return this rate to its 4% target only in 2025.
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Source: Gazeta
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