Russia’s central bank sharply made a large interest rate hike of 3.5% at an emergency meeting on Tuesday.
The decision to bring the key rate to 12% was announced after an emergency meeting of the Russian Central bank’s board of directors was called yesterday.
The regulator said that the decision is aimed at limiting price stability risks.
"Inflationary pressure is building up. As of 7 August, the annual rate of inflation rose to 4.4% while current price growth rates continue to increase. Over the last three months current price growth amounted to 7.6% on average in annualized terms on a seasonally adjusted basis. The same core inflation measure went up to 7.1%," the bank said.
The bank's decision is aimed at shaping monetary conditions and overall domestic demand dynamics necessary to bring inflation back to 4% in 2024 and stabilize it close to 4% further on.
The next meeting of the Russian central bank's board on the key rate will be held on September 15.