Russia signals possible interest rate hike

MOSCOW

The Central Bank of Russia may raise the policy interest rate 100 to 200 basis points at its meeting in July, Kiril Tremasov, the bank’s director of financial policy, said on Thursday.

Speaking at an event in the northwestern city of Murmansk, he said the bank held its last meeting on June 7.

"We’re currently evaluating the possibility of raising the policy interest rate," he added.

He said that the bank is closely following the situation in the markets and added, "In June, the possibility of raising the interest rate 100 basis points to 17% or 200 basis points to 18% was discussed.

"I think these possibilities will also be discussed in July."

Saying that inflation is projected to exceed the year-end expectation of 4.3-4.8%, Tremasov stated that this could also be discussed again at the next meeting.

At its last meeting on June 7, the Central Bank of Russia left the policy rate unchanged at 16%, indicating that an interest rate hike could be made at the next meeting.

* Writing by Gokhan Ergocun from Istanbul