The Bank of Russia has raised the key rate (the interest rate of loans granted to commercial banks) to 10.5% annually, which is about twice the rate in 2013 (5.5%). The Bank explained that the rate was adjusted to slow down the mid-term rise of consumer prices to 4%. Inflation risks could force further adjustments of the key rate, according to the Bank.
The Central Bank predicts an inflation rate of 10% in 2014. The weakening ruble, Russia’s ban on European food and other factors on markets are the causes of half of the indicator.
The economic growth rate in the next three years will be much lower than earlier forecast, as a result of low oil prices. The GDP rate in 2015-2016 will be around 0%. Investment of major capital will drop in the context of poor access of Russian companies to international capital markets and low prices for energy resources. The Central Bank added that the consumer activity in the country remains low.
The Council of Directors of the Bank of Russia will hold their next session on January 30.
The Bank of Russia has raised the key rate (the interest rate of loans granted to commercial banks) to 10.5% annually, which is about twice the rate in 2013 (5.5%). The Bank explained that the rate was adjusted to slow down mid-term rise of consumer prices to 4%. Inflation risks force further adjustments of the key rate, according to the Bank.The Central Bank predicts an inflation rate of 10% in 2014. The weakening rubles, Russia’s ban on European food and other factors on markets are the cause of half of the indicator.The economic growth rate in the next three years will be much lower than forecasted earlier, as a result of low oil prices. The GDP rate in 2015-2016 will be around 0%. Investments in the main capital will drop in the context of poor access of Russian companies to international capital markets and low prices for energy resources. The Central Bank added that the consumer activeness in the country remained low.The Council of Directors of the Bank of Russia will have the next session on January
