Russia’s Central Bank raised the key interest rate by 100 basis points from 12 to 13 percent.
The bank last lifted its interest rate during an emergency meeting one month ago in August, where the rate was raised by 350 basis points to 12 percent. The decision back then was “aimed at limiting price stability risks” amid inflation pressure, it said.
Following its meeting on Friday, the bank noted that “significant proinflationary risks have crystallised, namely the domestic demand growth outpacing the output expansion capacity and the depreciation of the ruble in the summer months,” adding that “inflationary pressure” continued to remain high.
It said that the decision to tighten monetary conditions was taken to limit inflation growth and further ensure that it returns to its 4 percent target in 2024.
“The return of inflation to the target and its further stabilization close to 4 percent also implies that tight monetary conditions will be maintained in the economy for a long period,” it said.
The bank has also raised its inflation forecast, noting that annual inflation would range from 6-7 percent in 2023.
The next key interest rate meeting will be held on Oct. 27, 2023, the central bank said.