Russian Federation Interest Rate

The Central Bank of Russia raised its benchmark policy rate by another 100 bps to 6.5 percent during its July meeting, citing high inflation expectations. The balance of risks shifted towards proinflationary and may cause inflation to deviate upwards from the 4 percent target for a longer period. The central bank also noted that the Russian economy has reached its pre-pandemic level in the second quarter of 2021. Policymakers will also consider the necessity of further key rate increase at upcoming meetings. According to the latest central bank's forecasts, annual inflation will reach 5.7-6.2 percent in 2021, before slowing to 4.0-4.5 percent in 2022 and will remain close to 4 percent further on.