Russia’s central bank surprised markets by leaving interest rates unchanged at 21%, citing improved monetary tightness that has brought inflation under control. The decision comes despite a 0.4 percentage point increase in the consumer price index to 8.9% in November, driven largely by rising food prices.
The central bank noted that tightening monetary conditions had created the necessary prerequisites for resuming disinflation processes and returning inflation to its target of 4% in 2026. However, Russian President Vladimir Putin acknowledged the country’s inflation problem during his annual Q&A session on Thursday, warning that it was an “alarming signal” despite economic growth forecasts.
The International Monetary Fund (IMF) predicts Russia will experience 3.6% growth this year, followed by a deceleration to 1.3% growth in 2025. The IMF attributes the slowdown to reduced tightness in the labor market and slower wage growth.
Source: https://www.cnbc.com/2024/12/20/russian-central-bank-surprises-markets-by-holding-key-rate-at-21percent.html