Russian Central bank expectedly retains key rate at 16% pa

MOSCOW. March 22 (Interfax) - The board of directors of the Central Bank of Russia at its meeting on Friday expectedly decided to retain the key rate at 16% per annum.

This decision is in line with the consensus forecast of analysts.

The regulator said that current inflation pressure is gradually weakening, though remains high. Domestic demand continues significantly to outpace the ability to expand the production of goods and services, and the labor market is once again tight.

"It is still too soon to judge the further pace of disinflationary trends. The monetary policy pursued by the Bank of Russia should consolidate the process of disinflation in the economy," the CBR said.

The return of inflation to the target level in 2024 and its stabilization near 4% going forward implies a long period of maintaining tight monetary conditions in the economy, the regulator said.

The CBR hiked the key rate by 100 basis points to 16% pa at its meeting on December 15, 2023, and the regulator retained the key rate at its next meeting on February 16.