Russian central bank preparing to hike key rate

Maria Novoselova / Vestnik Kavkaza

Russia's central bank may raise its key interest rate at its July 21 meeting after keeping the cost of borrowing unchanged since September last year, deputy governor Alexei Zabotkin said.

The key interest rate has remained at 7.5% since last September.

"The rate over this period corresponded to our understanding, including our forecast, of what is required to stabilize inflation near 4%. And so far data have confirmed this. But we see that the balance of risks has shifted to a large extent toward pro-inflationary," Alexei Zabotkin said.

According to him, they see an increase, expansion of domestic demand, both from the private sector and from the state sector, the acceleration of lending in recent months.

"And therefore at the upcoming meeting the Bank of Russia's board does not rule out the possibility of raising the key rate," Zabotkin said.

© Photo :Maria Novoselova / Vestnik Kavkaza