The Russian central bank has decided not to increase the interest rate further, maintaining it at 21% instead of the anticipated rise to 23%. This unexpected decision follows a call from President Putin, who expressed concern about rising inflation, describing it as an “alarming signal.” Central Bank Chair Elvira Nabiullina explained that previous rate hikes have already impacted the economy, and the bank needs time to assess how it adapts.
High interest rates, intended to curb inflation now at about 11%, have made loans expensive, affecting businesses and citizens. Some mortgage rates have soared to 36%, leading to exorbitant annual interest costs.
Putin suggested that the central bank could have used other measures to control inflation, which is influenced by Western sanctions and poor harvests. The central bank warned that prices are expected to continue rising, raising concerns about possible stagflation.
Source: NOS