The Bank of Russia has raised its benchmark interest rate to 15%, it announced on Friday, citing continuing inflationary pressures.
“The current inflationary pressure has ramped up significantly and stands higher than the Bank of Russia forecast,” the bank’s statement said.
The Central Bank noted that increased domestic demand exceeded Russia’s ability to expand production of goods and services. Inflationary expectations and lending growth rates also remain high.
The Bank of Russia is also to tighten its fiscal policies to fight inflation growth and bring it back to 4% by 2024. The Central Bank noted in its updated forecast that the year-on-year inflation rate will stand at between 7% and 7.5% by the end of the year.
Following Russia’s invasion of Ukraine and the imposition of Western sanctions on 28 February 2022, the Bank of Russia more than doubled its interest rate from 9.5% to 20%.