Russian central bank hikes policy rate by 100 basis points

ANKARA

Russia’s central bank hiked its key interest rate by 100 basis points on Friday, above the market forecast.

After keeping the rate unchanged at 7.5% for the sixth consecutive meeting, the bank decided to increase the key rate to 8.5% per annum in its July meeting.

“The Bank of Russia holds open the prospect of further key rate increase at its next meetings to stabilise inflation close to 4% in 2024 and further on,” the bank said in a statement.

The bank raised its inflation forecast for this year to 5%-6.5% and kept the 4% target for 2024.

According to the latest data, annual consumer inflation rose to 3.2% in June from 2.5% in May.

It forecast that the GDP growth rate will be 1.5-2.5% this year, 0.5-2.5% next year, 1.0-2.0% in 2025, and 1.5-2.5% in 2026.

• Russia