MOSCOW, February 27. /TASS/. The Board of Directors of the Bank of Russia considered two options at the first meeting in 2024 on the key rate - maintaining it at 16% and raising the rate by 100 basis points to 17%, the regulator said.

"Taking into account the facts acquired from the December decision on the key rate and the updated forecast, the discussion participants examined two solutions - maintaining the key rate at 16% per annum and increasing the key rate by 100 basis points to 17%," the statement said.

The rate increase was supported by a noticeable deterioration in foreign trade terms, including a drop in commodity market prices, as well as the risk of underestimating the economy's output gap or the speed with which it will be closed. Furthermore, by early February, there was no obvious sign of an ongoing drop in inflation, the regulator said.

On February 16, the Bank of Russia decided to maintain the key rate at 16% per annum at its first meeting in 2024, indicating that it is too early to judge the sustainability of the emerging disinflationary trends. "On 16 February 2024, the Bank of Russia Board of Directors decided to keep the key rate at 16.00% per annum. Current inflationary pressures have eased compared with the autumn months but remain high. Domestic demand is still outstripping the capabilities to expand the production of goods and services. A judgement on the sustainable nature of emerging disinflationary trends would be premature. The Bank of Russia’s monetary policy is set to solidify disinflation processes unfolding in the national economy," the regulator said.

The Bank of Russia will hold its next key rate review meeting on March 22, 2024.