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MOSCOW, December 11. /TASS/. The Central Bank of Russia has raised its key rate by 100 basis points to 10.5% amid increased inflationary expectations, the regulator said in a statement on Thursday.
The Russian monetary regulator will continue raising its key rate, if inflationary expectations increase further, the statement said.
Experts polled by TASS on Wednesday ahead of the Central Bank’s interest rate policy meeting said they expected the regulator to hike the rate by at least 1 percentage point. This scenario was envisaged by 12 out of 16 experts.
Russia’s economic activity is expected to recover in 2017 on the strength of import substitution and an increase in non-raw material exports, the Central Bank said.
Russia’s annual inflation may exceed 10% in the first quarter of 2015, it said.
“However, as the impact of the exchange rate dynamics on prices is exhausted, the economy gradually adapts to a change in external conditions and the restrictions on imports, inflation and inflationary expectations are expected to subside,” the statement said.
Moreover, the Central Bank predicts further slowdown in loans growth due to the rate increase.
“Due to today’s decision and the impact of the decisions taken by the Central Bank on the interest-rate policy, this process will continue,” the press release said.