The Bank of Russia increases the key rate by 1050 b.p. to 20.00% p.a.

On 28 February 2022, the Bank of Russia Board of Directors decided to increase the key rate by 1050 b.p. to 20.00% per annum. 

The Central Bank will make further decisions on the key rate based on risk assessment from external and internal conditions and other factors. 

Expanding demand continues to exceed the capacity to build up output. Given the limited nature of available labour resources, the rapid recovery of economic activity exacerbates inflationary pressure. 

The situation in the global commodity markets remains proinflationary. 

Inflation expectations do not decline so far, hitting multi-year highs. In this environment, the balance of risks has tilted even more towards proinflationary ones. 

The Bank of Russia’s monetary policy stance is aimed to return inflation to 11%.