Russia’s Central Bank Elvira Nabiullina said that the regulator may raise the key rate at the next meeting of the board of directors, since now some factors have emerged in favor of such a decision, TASS reported.
"There is a significant number of factors which are in favor of keeping it on the current level and there are some factors prompting us to consider the possibility of raising the key rate," she said.
Nabiullina noted that the Bank of Russia states higher volatility on financial markets, not only in Russia, but in the world. She added that the regulator will also take this factor into account when deciding on the key rate.
The advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking with Vestnik Kavkaza, said that the main factor in favor of raising of the rate is inflation. "Acceleration of inflation is associated with increase in fuel prices and expectations that the VAT will increase. This tax will be raised only on January 1, but knowing this, many companies have already started to raise prices," he noted.
"Second of all, there are fears of possible new sanctions, so the Central Bank wants to change key rate so that citizens would have more motivation to keep money in banks," he said.
The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, former deputy chairman of the Central Bank of Russia, Konstantin Korischenko, agreed that inflation risks have grown. "One of them is associated with devaluation of the ruble, after all, the ruble has weakened by almost 15%, and there's also so-called transfer effect, in other words, change of the inflation rate. Since the Central Bank targets 4% inflation, then, perhaps, it can reduce inflation pressures by raising the rate," he noted.