The Central Bank of the Russian Federation sharply raised the key rate to 21% per annum
The Central Bank of Russia unexpectedly increased the key rate to 21% per annum.
By decision of the Board of Directors of the Bank of Russia, the key rate was increased from 19 to 21% per annum.
The sudden increase amounted to 2 percentage points and became higher than the 2022 crisis level, the Bank of Russia website reports.
The previous February 2022 high was 20%.
The Bank of Russia explained its decision by the fact that inflation exceeded July forecasts.
The Central Bank noted that inflation expectations continue to grow.
Domestic demand is growing faster than the supply of goods and services can grow.
Additional budget expenditures and an increase in the deficit in 2024 also contribute to the rise in inflation.
Following the Central Bank of Russia's decision to raise the rate, the Moscow Exchange index rapidly fell below 2,700 points.
In this way, the Central Bank responded to current economic challenges.
