MOSCOW- Russia’s central bank held its key interest rate at 16% on Friday, keeping borrowing costs unchanged for the second meeting in a row after months of monetary tightening in response to stubbornly high inflation.
“The return of inflation to target in 2024 and its further stabilisation close to 4% assume that tight monetary conditions will be maintained in the economy for a long period,” the bank said in a statement according to Reuters.
Inflation, the bank’s main area of concern, stood at 7.4% in 2023, compared with 11.9% in 2022. Economists expect it to remain well above the central bank’s target this year.
The central bank had raised rates by 850 basis points in the second half of 2023, including an unscheduled emergency hike in August as the rouble tumbled past 100 to the dollar and the Kremlin called for tighter monetary policy, but has lately signalled a more dovish approach.
