2023-10-27 12:26:05
(Moscow) The Russian Central Bank (BCR) announced on Friday to raise its key rate from 13% to 15%, its fourth consecutive increase in just over three months to counter inflation and the weakening of the ruble, which remains in difficulty despite his efforts.
“Current inflationary pressures have increased significantly to a level above the Bank of Russia’s expectations,” the BCR said in a statement.
“Therefore, it is necessary to further tighten monetary policy,” she justified, with the aim of “bringing” inflation, currently at +6%, towards “the objective […] the 4% and 2024 ».
This increase is greater than anticipated by observers who were counting on an increase to 14% in the key rate.
The announcement comes as Russian MPs noted on Thursday the explosion in federal military spending in 2024 (+68% over one year).
However, every day, the conflict in Ukraine weighs heavily on Russian finances and the economy.
Under the effect of sanctions, the weakening of the ruble in recent months has been accompanied by a return of inflation, causing many Russians to fear for their purchasing power.
The cause in particular is the considerable drop in revenues linked to the sale of hydrocarbons, under the weight of sanctions and the declared determination of Europeans to end their energy dependence on Moscow.
The BCR had already raised its key rate, a first time in July (from 7.5% to 8.5%), then in mid-August, urgently, to 12% in the face of the weakening of the ruble, and finally in mid-September to 13%.
But this did not have the expected effect: the ruble remains at a weak level against the euro and the dollar.
On Friday, it took 92.6 rubles to get a greenback and 97.8 for a euro, levels almost as low as those of March 2022, after the launch of the Russian assault in Ukraine.
In this gloomy context, the BCR had already said it expected a slowdown in growth in the second half of 2023. However, it noted on Friday “more rapid development” than it had forecast in September.
The monetary institution also revised upwards its inflation forecasts for 2023, “between 7 and 7.5%”.
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