MOSCOW, September 15. /TASS/. One of the reasons for the Bank of Russia to raise the key rate was the weakening of the ruble, Governor of the Bank of Russia Elvira Nabiullina said at a press conference following a meeting of the regulator's board of directors.
"Today we decided to raise the key rate to 13% per annum. The steps taken since July to raise the key rate are a response to inflation risks, including the influence of the exchange rate," she said.
The Bank of Russia updated its macroeconomic forecast and, based on it, confirmed the level of the key rate, which, according to Nabiullina, is necessary to achieve the inflation target of 4% by the end of next year. "In the current environment, returning to the target will require a long period of tight monetary policy," she noted.
Nabiullina added that the Bank of Russia will keep its key rate at a higher level until inflation stabilizes. "In the base scenario, the average key rate will be 13-13.6% for the rest of this year and 11.5-12.5% per annum next year. This indicates that we will keep the key rate at a higher level as long as it is necessary to achieve a sustainable decline in inflation and inflation expectations," she said.
She noted that the Bank of Russia considered three options for the key rate, including keeping the figure at the same level or raising it by more than 100 basis points.
Meanwhile, according to Deputy Chairman of the Bank of Russia Alexey Zabotkin with the continued decline in inflation and inflation expectations the key rate may be reduced in 2024. "The average key rate for next year is expected to be 11.5-12.5%. Both of these figures are less than 13%, which means that next year the key rate may be reduced if the situation develops within the parameters of the baseline forecast. However, the exact trajectory of this movement and when it will begin will depend on how the situation with the current rise in prices and inflation expectations develops," he explained.
Earlier on Friday, the Bank of Russia raised the key rate by 100 basis points to 13% per annum and said it would consider the feasibility of its further increase at upcoming meetings. "Significant proinflationary risks have crystallized, namely the domestic demand growth outpacing the output expansion capacity and the depreciation of the ruble in the summer months. Therefore, it is required to additionally tighten monetary conditions to limit the upward deviation of inflation from the target and return it to 4% in 2024. The return of inflation to the target and its further stabilization close to 4% also implies that tight monetary conditions will be maintained in the economy for a long period," the regulator said. The Bank of Russia Board of Directors will hold its next rate review meeting on October 27.