On April 23, at a meeting on monetary policy, the Bank of Russia again raised its key rate by 25 bp. up to 5%.
The rapid recovery in demand and heightened inflationary pressures necessitate an early return to monetary neutrality.
The Bank of Russia will assess the feasibility of a further increase in the key rate at the next meetings. Decisions on the key rate will be made taking into account the actual and expected dynamics of inflation in relation to the target, the development of the economy over the forecast horizon, as well as the assessment of risks from internal and external conditions and the reaction of financial markets to them.
Under the current monetary policy, annual inflation will return to the Bank of Russia’s target in mid-2022 and will remain close to 4% thereafter. The Bank of Russia inflation forecast for 2021 has been raised to 4.7-5.2%.
The Central Bank of the Russian Federation assumes a key rate in the range of 4.8-5.4% in 2021 and 5.3-6.3% in 2022.
The next meeting of the Bank of Russia Board of Directors, at which the issue of the key rate level will be considered, is scheduled for June 11, 2021.
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