On February 11, the Bank of Russia raised the key rate by 1 p.p. to 9.5% as the inflations rate has surpassed the October forecast, the regulator said.
As the Russian central bank noted, the high level of economic activity with no additional labor force has increased the inflationary pressure. Moreover, the situation in the international markets is still uncertain and the inflation expectations have stuck to multiyear highs. In this situation, the balance of risks scoots aside inflation. In turn, the Bank of Russia has been conducting a monetary policy aimed at getting the inflation rate back to 4%.
In January, consumer price inflation started to grow once again after it dropped a bit in December. However, the rate is still lower than the figures last fall. Annual inflation grew to 8.7% in January (the rate was about 8.4% in December 2021). As of February 4, the inflation rate was 8.8%.
It is expected that the monetary policy of the Bank of Russia will cause annual inflation to decrease to 5.0–6.0% in 2022 and reach the target rate in mid-2023. The rate is expected to stick to 4% give or take later on.
On December 17, 2021, the Bank of Russia increased the key rate by 1 p.p. to 8.5%. The increase of the key rate started on March 19 when the bank increased the rate by 25 points to 4.5%. On April 23, the regulator raised the rate to 5%. On June 11, the rate was increased by 50 p.p. to 6.5%. On September 10, the Russian central bank once again decided to raise the key rate to 6.75%. A month later, on October 22, the rate was increased by 75 points to 7.5%.