Russian Monetary Policy Rate Hiked Full Percentage Point to 9.5%
February 11, 2022
The Central Bank of Russia took even more aggressive monetary policy action, lifting its policy rate to 9.5% following increases of 100 basis points also in December and 75 bps in October. Over the past 11 months, the rate has risen 525 basis points, and a released statement “holds open the prospect of further key rate increase at its upcoming meetings. Key rate decisions will be made taking into account actual and expected inflation movements relative to the target, economic developments over the forecast horizon as well as risks posed by domestic and external conditions and the reaction of financial markets.” Russian CPI inflation is currently at 8.7% and still cresting. Unemployment is at an all time low, with acute labor shortages. Military operations in Ukraine, which Russia appears imminently prepared to initiate, are likely to subject the economy to further inflationary stress and may put downward strain on Russian growth, which the statement is projecting likely to expanded 2-3% this year but somewhat weaker in 2023. The statement doesn’t mention Ukraine, Eastern Europe, or Nato.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Russia
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