Russian Central Bank raises key interest rate by 100 basis points to 16 percent

Russia’s Central Bank has decided to increase the key interest rate by 100 basis points to 16 percent per annum.

“The current inflationary pressure remains high. Based on 2023’s results, annual inflation is expected to be near the upper limit of the forecast range of 7.0–7.5 percent,” reads the Russian Central Bank’s statement.

The bank warned that “getting inflation back to the target by 2024 and keeping it stable at around 4 percent” would require keeping strict financial policies in place for a long time.

The last time the Russian Central Bank raised the key rate was on October 27, from 13 percent to 15 percent. Many experts expected the rate to be raised to 16 percent. The key rate reached its highest point in recent years in February 2022, when it was raised from 9.5 percent to 20 percent following the full-scale invasion of Ukraine. Subsequently, the Russian Central Bank began to lower the rate and brought it down to 7.5 percent. The rate began to rise again in July 2023.