MOSCOW, July 26. /TASS/. The first cyclic economic overheating in a decade has occurred in Russia, Central Bank Governor Elvira Nabiullina told a press conference following the meeting of the board of directors on the key rate.

Analysts have projected the start of the key rate reduction soon on the basis of data available in early 2024, including inflation having notably slowed down, inflation expectations declining, instability on the labor market having stopped growing, monetary policy tightening, growth of consumer activity having slowed down, while households’ propensity to save rising, she noted.

"Such confidence of experts of the financial market and business was probably strengthened by the fact that actually [in] 10 years of inflation targeting this is the first case of cyclic overheating when a long period of high rates is required for cooling demand," Nabiullina stressed.

Earlier on Friday the board of directors of the Bank of Russia decided to increase the key rate for the first time since December 2023 - by 200 basis points to 18% per annum, saying that inflation has accelerated and is developing significantly above the regulator’s April forecast. The Bank of Russia noted that it would consider the necessity of further key rate increase at its upcoming meetings.