The central bank board met on rates after raising the key rate from 9.5% on Feb. 28 to 20% to support financial stability when the rouble crashed to record lows as the West imposed sanctions against Russia over its actions in Ukraine.
The rate decision was in line with a consensus forecast of analysts polled by Reuters. On Friday, the central bank said in a statement Russia was entering ” a temporary but inevitable period of increased”, while flash indicators suggested a deterioration in the economy that will shrink in the coming quarters.
The central bank did not give inflation or economic forecasts for this year, saying it aimed to return inflation to its 4% target in 2024. The rouble weakened after the rate decision to 104.35 against the dollar from levels around 103 seen shortly before the announcement. Elvira Nabiullina, governor of the central bank, will shed more light on the central bank’s forecasts and monetary policy plans at an online briefing.
The next rate-setting meeting is scheduled for April 29. VTB Capital analysts said the central bank is expected to keep rates unchanged until mid-2022 and lower them to 16% by year end.
