The Bank of Russia has decided to keep the key rate at 4.25% per annum. In recent months, price growth rates were slightly higher overall than the Bank of Russia's expectations, the regulator notes.
This is driven by two key factors: an active recovery of demand after the lockdown as well as the weakening of the ruble on the back of generally increased volatility in global markets and higher geopolitical risks. Inflation expectations of households and businesses remain elevated.
Although the effect of short-term proinflationary factors has strengthened, disinflationary risks still prevail in the medium run. As the stage of lively recovery growth owing to restriction lifting and support measures completes, the pace of return of the global and Russian economies to their potential will slow down. This will have a constraining effect on price growth rates, the Central Bank points out.
