The Bank of Russia keeps the key rate at 7.50% p.a.
The updated forecast assumes inflation for the end of 2022 to total 12.0–13.0%
On 28 October 2022, the Bank of Russia Board of Directors decided to keep the key rate at 7.50% per annum, according to the regulator.
Current growth rates of consumer prices as a whole remain low, contributing to a further slowdown in annual inflation. Inflation expectations of households and businesses are high and have slightly grown relative to the summer months. The updated forecast assumes inflation for the end of 2022 to total 12.0–13.0% and takes into account the preponed indexation of utility prices among other factors. The Bank of Russia assesses that the partial mobilisation will serve as a deterrent to consumer demand and inflation over the horizon of coming months. However, its subsequent effects will be pro-inflationary as it adds to supply-side restrictions.
Moving forward, in its key rate decision-making, the Bank of Russia will take into account actual and expected inflation dynamics relative to the target and economic transformation processes, as well as the risks posed by domestic and external conditions and the reaction of financial markets. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will drop to 5.0–7.0% in 2023 to return to 4% in 2024.
The Bank of Russia Board of Directors will hold its next key rate review meeting on 16 December 2022.
