Inflation in Russia.. and borrowing from the central bank at a record level

Inflation in Russia.. and borrowing at the Central Bank at a record level

The Central Bank of Russia kept borrowing costs at a record level for the second consecutive time, but left the door open to the possibility of tightening monetary policy at its next meeting to address the ongoing inflation.

The Central Bank of Russia also decided on Friday to keep the key interest rate at 21%, as expected by all economists. Policymakers said in a statement: "The Bank will assess the need to raise the key interest rate at its next meeting, taking into account the speed and sustainability of inflation slowdown."

Bank Governor Elvira Nabiullina had stated in December that the Bank may choose to keep the Russian interest rate unchanged or raise it at its first meeting of the year, noting the need to reduce the state of "excessive activity" while avoiding "excessive slowdown". Since then, lending to companies and individuals has continued to slow down according to Central Bank data.

Nabiullina made a sudden decision in December to sharply tighten monetary policy, citing a sharp slowdown in lending. Russian President Vladimir Putin has already acknowledged concerns among the business sector that combating inflation could hinder the economy, which is suffering from sanctions imposed on Russia due to the invasion of Ukraine. The Central Bank raised interest rates by 5 percentage points last year. Nabiullina is scheduled to hold a press conference at 3 p.m. Moscow time.

In Russia.. and borrowing at the Central Bank at a record level

The Central Bank of Russia kept borrowing costs at a record level for the second consecutive time, but left the door open to the possibility of tightening monetary policy at its next meeting to address the ongoing inflation.

The Central Bank of Russia also decided on Friday to keep the key interest rate at 21%, as expected by all economists.

Policymakers said in a statement: "The Bank will assess the need to raise the key interest rate at its next meeting, taking into account the speed and sustainability of inflation slowdown."

Bank Governor Elvira Nabiullina had stated in December that the Bank may choose to keep the Russian interest rate unchanged or raise it at its first meeting of the year, noting the need to reduce the state of "excessive activity" while avoiding "excessive slowdown". Since then, lending to companies and individuals has continued to slow down according to Central Bank data.

Nabiullina made a sudden decision in December to sharply tighten monetary policy, citing a sharp slowdown in lending.

President Vladimir Putin has already acknowledged concerns among the business sector that combating inflation could hinder the economy, which is suffering from sanctions imposed on Russia due to the invasion of Ukraine.

The Central Bank raised interest rates by 5 percentage points last year. Nabiullina is scheduled to hold a press conference at 3 p.m. Moscow time.

Source: Al-Sharq