The Russian Central Bank keeps the key interest rate at its current level of 16% annually

Russia – The Board of Directors of the Russian Central Bank decided at its meeting yesterday to maintain the key interest rate at its current level of 16% annually, in a decision that was in line with the expectations of markets and experts.

Thus, the Russian Central Bank has kept the key interest rate at its current level of 16% for the third time in a row.

The Russian Central Bank confirmed that the inflation rate will decline to the target level at a slower pace than expected, and that annual inflation in Russia will return to the target level of 4% next year 2025, and at the end of this year the index will be at 4.3% – 4.8%.

The Bank of Russia (the central bank) raised its forecast for Russian GDP growth for the year 2024 to 2.5% – 3.5%.

The Russian Central Bank also improved its expectations for the price of a barrel of “Brent” in the year 2024 to $85 from $80, and for the next year 2025 it raised it to $80 from $75 per barrel.

Last February, the Russian Central Bank decided, in its first meeting in 2024, to maintain the main interest rate at its current level of 16% annually.

Since last July, the Russian Central Bank began raising the main interest rate to curb inflation. Last July, the interest rate increased by only one percentage point (1%), but a month later, in an emergency meeting, the Central Bank raised the interest rate sharply by 3.5% in light of the decline in the ruble exchange rate.

Last fall, the central bank raised the interest rate by 3 percentage points, and in December 2023, it raised it by 1% to 16%.

Source: TASS