10 Apr 2024 12:59

Russia has passed peak inflation owing to tight monetary policy - Nabiullina

MOSCOW. April 10 (Interfax) - Russia has passed peak inflation owing to tight monetary policy, Central Bank Governor Elvira Nabiullina said during a plenary meeting of the State Duma.

"We are already seeing the first results of our policy, that peak inflation is behind us," Nabiullina said.

"When looking at the current growth in prices, meaning month-on-month, one can see that the annualized figure was double-digit from July to November, and inflation pressure was very heavy. It declined markedly in December-January, and is now around 6 %," Nabiullina said.

Inflation would have been higher without hiking the key rate, Nabiullina said.

"If we had not hiked the key rate, then inflation would have been much higher than the 7.4% that we had at the end of last year. Moreover, it would have continued to accelerate today," Nabiullina said.

The Central Bank of Russia began hiking the key rate in July 2023, raising it by 100 basis points to 8.5% per annum, and the CBR decided to hike the key rate immediately by 350 bps to 12% pa at an extraordinary meeting of the regulator's board of directors in August. The CBR raised the key rate by another 100 bps to 13% pa in September, by 200 bps to 15% pa in October, and by 100 bps to 16% pa in December. The CBR retained the key rate at 16% pa in February and March 2024. The next meeting of the CBR's board of directors is on April 26.

"We intend to begin reducing the key rate when we are convinced that the slowdown in inflation has gained the required pace and inflation expectations are returning to normal," Nabiullina said.