The Bank of Russia has increased the key rate by 50 bpts to 5.50% per annum, the regulator informed.
Both the Russian and global economies are recovering faster than expected. Inflation is developing above the Bank of Russia's forecast.
Increased inflationary pressure in the context of the completing economic recovery can lead to a more substantial and prolonged deviation of inflation upward from the target. This creates the necessity of further increases in the key rate at upcoming meetings, the Central Bank notes.
The contribution of persistent factors to inflation is increasing due to faster growth of demand compared to output expansion capacity. Over a short-term horizon, this influence is strengthened by price growth in global commodity markets. Taking into account high inflation expectations, the balance of risks has significantly shifted towards proinflationary ones, the statement emphasizes.
