Dmitry Desyatnichenko, an associate professor of the economics department in St. Petersburg, explains what might follow if the Bank of Russia raises the key rate to 15 percent. He notes that markets are likely to largely overlook such a sharp increase in the policy rate at first. Yet a persistent rise could quietly lift the cost of borrowing for the whole economy, including businesses and the government, over time.
Desyatnichenko points out that deposit rates tend to lag behind the initial cycle of a basic rate hike. He observes that ruble liquidity remains very high, leading to undervaluation of the ruble and ruble-based assets. This dynamic suggests that even with a rate spike, investors and borrowers could experience unusually cheap liquidity in the near term, followed by tighter conditions if the rate path persists.
He also suggests that the previous rounds of higher rates have not yet produced a clear dampening effect on inflation or demand. The market’s reaction, in his view, will depend on how the rate changes are communicated, how quickly they are implemented, and how accompanying measures address inflationary pressures and fiscal spending.
Earlier, the governor of the Bank of Russia, Elvira Nabiullina, affirmed during a press conference that the central bank possesses effective tools to curb inflation. She indicated a readiness to raise the rate with concrete, well-structured steps aimed at guiding inflation back toward the 4 percent target. The emphasis was on measured action rather than abrupt shifts, paired with transparent policy signaling.
In related policy context, Russia had already established a uniform personal income tax framework for remote workers. This change reflects ongoing adjustments to tax policy and cross-border economic activity, with potential implications for how households and businesses budget in a shifting financial landscape. The broader takeaway for global investors is to monitor how central banks balance inflation control with the needs of growth, especially in economies subject to currency value fluctuations and external financial pressures.