Bank of Russia raises key rate by 100 bp to 19% per annum

The Bank of Russia raised the key rate by 100 basis points to 19 percent per annum and indicated the possibility of raising the figure once again at the next meeting, according to a press release issued following the meeting of the regulator's Board of Directors.

"On 13 September 2024, the Bank of Russia Board of Directors decided to increase the key rate by 100 basis points to 19.00 percent per annum. Current inflationary pressures remain high. By the end of 2024, annual inflation is likely to exceed the July forecast range of 6.5 - 7 percent," the press said according to the Russian news agency (TASS).

Head of the regulator Elvira Nabiullina added that today's decision by the Bank of Russia to raise the key rate by 1 percentage point, to 19 percent per annum will strengthen the impetus for reducing inflation from the side of the monetary policy," but the July inflation forecast of 6.5-7 percent will probably be exceeded.''

"Growth in domestic demand is still significantly outstripping the capabilities to expand the supply of goods and services. Further tightening of monetary policy is required to resume the disinflation process, reduce inflation expectations, and ensure the return of inflation to the target in 2025. The Bank of Russia holds open the prospect of increasing the key rate at its upcoming meeting," the press release said.