16 Feb 2024 14:10

Central Bank of Russia expectedly holds key rate at 16%

MOSCOW. Feb 16 (Interfax) - The Central Bank of Russia (CBR) board at a meeting on Friday decided to hold the key rate at 16% per annum.

This decision is in line with analysts' consensus forecasts.

The regulator notes that current inflationary pressures have eased compared with the autumn months but remain high. Domestic demand is still outstripping the capabilities to expand the production of goods and services.

"A judgement on the sustainable nature of emerging disinflationary trends would be premature. The Bank of Russia's monetary policy is set to solidify disinflation processes unfolding in the national economy," the regulator said.

The return of inflation to target in 2024 and its further stabilization close to 4% assume that tight monetary conditions will be maintained in the economy for a long period.

Household inflation expectations have declined since the beginning of this year, approaching the levels registered in 2023 Q3. Businesses' price expectations have also moved lower. However, inflation expectations remain elevated. This determines the inertia of current high price growth.

At its previous meeting on December 15, 2023, the Central Bank raised the key rate by 100 basis points (bps) to 16% per annum.