Russian Central Bank decides to hike key rate by 100 bps to 16.0% pa

MOSCOW. Dec 15 (Interfax) - The board of directors of the Central Bank of Russia (CBR) at a meeting on Friday decided to hike the key rate by 100 basis points to 16.0% per annum, the regulator said in a statement.

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

The CBR notes that inflationary pressure currently remains high.

"Annual inflation is expected to be close to the upper limit of the forecast range of 7.0%-7.5% in 2023. Meantime, according to the Bank of Russia, GDP growth in 2023 should be higher than the October forecast and exceed 3%. This means that the upward deviation of the Russian economy from the balanced growth trajectory in the second half of 2023 turned out to be more significant than the Bank of Russia had estimated in October," the CBR said.

Household inflation expectations and enterprise price expectations have increased.

The CBR also notes the emergence of signs of a slowdown in activity in some segments of the lending market although overall lending growth remains strong.