Russia Raises Key Interest Rate to 15%... 7.5%P Increase in Four Months

Exterior view of the Central Bank of Russia headquarters located in downtown Moscow. [Image source=Yonhap News]

On the 27th (local time), the Central Bank of Russia raised its benchmark interest rate from 13% to 15% per annum.

According to the RIA Novosti news agency, the Central Bank of Russia's board announced a 2 percentage point increase in the benchmark rate on that day. The Central Bank stated, "Inflationary pressures have risen significantly more than expected," and described the decision as "one that seriously considers inflation risks."

As a result, the Central Bank of Russia has raised interest rates by a total of 7.5 percentage points over the past four months in response to accelerating inflation. In July, the benchmark rate was raised from 7.5% to 8.5%, and in August, when the ruble sharply depreciated, the rate was increased by a substantial 3.5 percentage points. Following a 1 percentage point hike in September to 13%, the rate was raised again to 15% on this occasion.

According to the Russian Ministry of Economic Development, the annual inflation rate reached 6.59% as of the 23rd. The Central Bank of Russia has revised its inflation forecast for this year upward from 6.0?7.0% to 7.0?7.5%. The central bank expects inflation to return to 4% next year.