Bank of Russia mulls key rate hike at July

The Board of Directors of the Bank of Russia will review key macroeconomic forecast parameters, including a potential upward adjustment of the key interest rate, during their meeting on July 26, according to Deputy Chairman Alexey Zabotkin.

Zabotkin explained that the trajectory of the key rate is closely tied to inflation trends and the intensity of inflationary pressure. “An upward revision of the inflation forecast, if it is associated with stable factors on the demand side, inevitably entails an upward revision of the key rate trajectory,” he noted.

He also indicated that the justifications for maintaining the current key rate have weakened considerably since the last meeting.

The upcoming meeting on July 26 will be crucial for determining the future path of the key rate, which has remained unchanged at 16 per cent per year since June 7, despite indications of a possible increase.

The Bank of Russia’s decision to potentially raise the key rate highlights growing concerns over inflation and its impact on the economy.

Attribution: TASS