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The Bank of Russia raised its key interest rate

Банк России повысил ключевую ставку

The Bank of Russia took a decision to raise the key rate by 0.25 percentage points to 7.75 percent per annum. This is stated in the message controller.

The controller increases the rate for the second time this year. The rate increase in December, “is preemptive in nature” and seeks to limit risks from rising inflation in the short term, due to including rising prices and the impending increase in value added tax (VAT) to 20 per cent.

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“Raising the key rate will prevent a steady consolidation of inflation at a level substantially exceeding the target of the Bank of Russia”, — said in a release controller, which predicts that inflation by the end of 2018 will be at the level of 4 percent.

“Continuing the adjustment of prices to what has happened since the beginning of year the ruble weakening. The pace of growth of consumer prices already beginning to affect the forthcoming 1 January 2019 the VAT increase”, — stated in the message controller.

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Many analysts believed that the Central Bank will not raise rates, as good reasons there is, however, the regulator has decided to “pre-emptive strike”. The next meeting of the regulator held on 8 February 2019. At the last meeting of the Board of Directors of the Bank of Russia, which took place on 14 September, the regulator also raised the rate by 0.25 percentage points.

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