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Nabuillina: the decision on the rate will depend on the situation in the economy

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Further decisions on the key rate will be made depending on the situation in the Russian economy; the Central Bank’s forecast provides for both its increase and its preservation until the end of the year. This was stated by the Chairman of the Central Bank, Elvira Nabiullina, speaking at the XX International Banking Forum, a Vedomosti correspondent reports.

“It all depends on how the situation develops <...> The forecast for this year also implies that the rate until the end of the year may remain at the current level, or may increase,” she said.

There are a lot of uncertainties in the economy now; the regulator is analyzing the effect on inflation of decisions already made.

In September, the Bank of Russia predicted that annual inflation would continue to rise in the coming months due to increasing price pressure. In 2023, annual inflation will be 6-7%. It will return to 4% in 2024 and will remain at this level in the future, the Central Bank said. The regulator clarified that this required an increase in the key rate.

On September 15, the Central Bank raised the key rate by 1 percentage point to 13%. This is the third consecutive rate increase in a month and a half: first, the Central Bank raised the rate at a meeting on July 21 by 1 percentage point to 8.5%, and then unscheduledly increased the rate on August 15 immediately to 12%.

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