Moscow (AFP)
Russia's central bank on Friday raised its key rate for the fourth time in a row, by one point to 6.5%, the largest increase since 2014 as inflation has been rising for months in the country.
"Inflation is moving above the forecasts of the Bank of Russia," the monetary institution said in a statement, adding that its decision "aims to limit this risk" and reduce inflation to 4%, against 6 , 5% currently.
Faced with inflation, the Bank of Russia began to increase its historically low rate in March, a first since 2018.
This is the fourth consecutive significant increase, while the voice of the director of the bank, Elvira Nabioullina, rises regularly to alert the authorities to a phenomenon that she fears more lasting than expected.
According to the central bank, "the faster growth in demand relative to the capacity to expand production" explains inflation as the Russian economy has returned to pre-pandemic levels.
In June 2021, inflation rose further to 6.5%, driven in particular by food prices, and has remained unchanged since.
The Russian central bank estimates that "annual inflation will reach 5.7-6.2% in 2021" and will not return to 4%, its target, until 2022.
The explosion in staple food prices prompted the Russian authorities to introduce measures such as export quotas or government food price controls, an administrative cap criticized by Ms. Nabioullina.
In its statement, the central bank said it would not rule out future interest rate hikes.
The bank's next monetary policy meeting is scheduled for September 10.
© 2021 AFP