Russia’s central bank has raised its key interest rate by a higher-than-expected 200 basis points to 15%, marking the fourth consecutive rate hike in response to a weak rouble and persistent inflation pressure, CNBC reports.
The central bank has now raised rates by a total of 750 basis points since July, including an emergency hike in August due to the rouble’s sharp decline.
The central bank stated that current inflationary pressures exceeded its expectations, driven by strong domestic demand, high lending growth, and increased government spending, particularly in the defense sector due to the conflict in Ukraine.
The bank also acknowledged it might not achieve its 4% inflation target by 2024 and forecast year-end inflation for 2024 at 4-4.5%.
