The Russian Central Bank (BCR) announced on Friday that it would maintain its key rate at 16%, to cope with high inflation, under the effect of heavy Western sanctions put in place due to the Kremlin’s offensive in Ukraine.
The BCR’s key rate was raised to 16% in December, this was the fifth consecutive increase since July to curb inflation which is weighing down the purchasing power of Russians.
Current inflationary pressures are gradually easing but remain high, the Central Bank said in a statement on Friday.
The Central Bank’s monetary policy must solidify the processes of disinflation underway in the national economy, she assured.
But it is premature to judge the pace of future disinflationary trends, she specifies, estimating that in the medium term, the balance of inflation risks is still tilted towards the rise.
Inflation in Russia accelerated in February to 7.7% year-on-year, according to figures from the national statistics agency Rosstat, a high level at a time when multiple factors linked to the conflict in Ukraine are creating an inflationary spiral.
In January 2024, inflation had stagnated in January at 7.4% over one year, as in December 2023, after seven months of continuous increase.
The surge in prices remains one of the main concerns of the Russian population, whose purchasing power is weighed down by the effect of these sanctions and due to the weakening of the ruble in relation to the dollar and the euro.
The lack of labor linked to the departure of hundreds of thousands of Russians to the front or abroad, flexible credit conditions and sharply increasing federal spending have also contributed to the increase in prices.
The next meeting of the Central Bank on the key rate is scheduled for April 26.