The head of the Central Bank, Elvira Nabiullina, said that inflation in Russia would have exceeded 10% if the key rate had not been raised in 2021. She announced this at a press conference, TASS reports.
“If we hadn’t started raising the rate last spring, inflation would have been much higher than 10% today,” she said.
According to her, there has been no turning point in inflation dynamics in Russia.
Earlier, the Bank of Russia explained its decision to raise the key rate in increments of 1 percentage point to 9.5% per annum. The regulator's reasoning is set out in its press release following the meeting of the Board of Directors of the Central Bank. The regulator noted that inflation is growing above forecasts, and inflation expectations of the population are not decreasing yet.
The Central Bank noted that annual inflation in January increased to 8.7% (after 8.4% in December 2021). As of February 4, it was 8.8%.
The regulator raised its inflation forecast. According to the forecast of the Bank of Russia, taking into account the ongoing monetary policy, annual inflation will decrease to 5.0–6.0% in 2022 and return to the target in mid-2023. In the future, annual inflation will be close to 4%. Earlier, the Central Bank predicted a price increase of 4-4.5% in 2022. Annual inflation, according to the Central Bank, will be 6.8-7.7% in 2022.
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