Bloomberg: the Central Bank of Russia by the end of the year may raise the key rate to 6%

By the end of 2021, the Bank of Russia may raise the key rate by 125 basis points, up to 5.5% or even up to 6%, a source told Bloomberg. According to agency polls, analysts expect no more than 50 basis points to grow this year. Now the rate is at a record low level of 4.25%.

Bloomberg notes that inflation in Russia in February exceeded forecasts and reached 5.7%. The agency’s source also claims that the tightening of monetary policy is due to concerns about the government’s plans to increase budget spending and thus increase price pressure. The Central Bank did not respond to a Bloomberg request.

SberCIB, TS Lombard and Sovcombank expect a key rate hike on Friday, March 19. However, most economists do not predict this, reports Bloomberg.

Earlier, the head of the Elvira Nabiullin regulator reported that the Bank of Russia does not exclude the increase in the key rate already in 2021, subject to the restoration of the economy. It admits a decrease in the rate only when inflation is reduced.

About the plans of the Central Bank – in the material “Kommersant” “The key rate will be transferred to neutral mode.”

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