The Russian central bank has decided to keep interest rates at 20% but warns of considerable uncertainty.
In late February, shortly after Russian forces invaded Ukraine, the Central Bank of the Russian Federatio more than doubled its key interest rate from 9.5% to 20% in an effort to support its plummeting currency. . Today, the Central Bank of Russia kept its monetary policy stable with the interest rate pegged at 20%, but warned of considerable uncertainty. “The Russian economy is entering the phase of a large-scale structural transformation, which will be accompanied by a temporary but inevitable period of rising inflation, mainly related to relative price adjustments in a wide range of goods and services,” he said. said the bank. “The monetary policy of the Bank of Russia is set to allow for a gradual adaptation of the economy to the new conditions and a return of annual inflation to 4% in 2024”.
The ruble sank to historic lows against the dollar in the wake of the flurry of sanctions imposed on Moscow by the US and European allies. Earlier this week, Russia managed to avoid a historic debt default by completing some of its dollar sovereign bond payments.