Russian Central Bank hikes interest rates by 200 bps, matching forecast

ANKARA

The Central Bank of Russia on Friday raised its key interest rate by 200 basis points to 18%, matching market expectations.

Highlighting that the inflation gained momentum to hover significantly above the bank's April forecast, the bank said: "For inflation to begin decreasing again, monetary policy needs to be tightened further."

According to the latest data, the annual consumer inflation rate in Russia accelerated for the sixth consecutive month to 8.59% in June, highest since Feb. 2023.

"The Bank of Russia will consider the necessity of further key rate increase at its upcoming meetings," it said.

The bank raised its year-end inflation forecast for 2024 to 6.5-7%.

"Given the monetary policy stance, annual inflation will decline to 4.0–4.5% in 2025 and stay close to 4% further on," it said.

In the previous five consecutive meeting the bank kept the key rate unchanged at 16%.