Russian central bank: High rates likely
needed throughout 2024
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[October 03, 2023]
By Elena Fabrichnaya
MOSCOW (Reuters) -Russia will probably need to keep interest rates high
throughout 2024, the Bank of Russia's Deputy Governor Alexei Zabotkin
said on Tuesday, addressing the upper house of parliament after the
rouble weakened back past 100 to the dollar.
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A Russian state flag flies over the Central Bank headquarters in Moscow,
Russia, August 15, 2023. A sign reads: "Bank of Russia". REUTERS/Shamil
Zhumatov/File Photo |
The
central bank raised interest rates to 13% last month, following
an emergency 350-basis-point rate hike to 12% in August, as
Russian authorities seek to halt rouble weakening that feeds
into already stubborn inflationary pressures.
"In the last three months, we have undertaken significant
monetary policy tightening, raised the rate to 13%," Zabotkin
told the Federation Council. "To return inflation to the 4%
target, tight monetary policy will probably need to be
maintained throughout next year."
Analysts polled by Reuters expect the central bank to hike rates
again at its next scheduled meeting on Oct. 27.
The Bank of Russia's baseline forecast for the average rate
range in 2024 is 11.5-12.5%. The range is seen returning to the
neutral 5.5-6.5% in 2026 as inflation eases.
Zabotkin said monetary policy aimed at reducing inflation would
increase the attractiveness of the rouble and contribute to the
exchange rate stabilising. He said the rouble's weakening was
boosting the population's inflation expectations.
(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow;
Editing by Sharon Singleton and Mark Potter)
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