On March 17, 2023, the Board of Directors of the Bank of Russia kept the key rate at 7.5% per annum. The current rate of price growth remains moderate, including in terms of sustainable components. Inflation expectations of the population have significantly decreased, but remain at an elevated level, as well as price expectations of enterprises. This is stated in the message of the regulator.
Operational data indicate a continued recovery in business and consumer activity. The acceleration of budget spending, the deterioration of foreign trade conditions and the state of the labor market continue to form pro-inflationary risks. In general, the balance of risks to inflation has not changed significantly since the previous meeting of the Board of Directors of the Bank of Russia.
The Central Bank will make further decisions on the key rate taking into account the actual and expected dynamics of inflation relative to the target, the process of structural adjustment of the economy, as well as assessing the risks from internal and external conditions and the reaction of financial markets to them. With increasing pro-inflationary risks, the Central Bank will assess the feasibility of raising the key rate at the next meetings. According to the forecast of the Bank of Russia, annual inflation will be 5-7% in 2023 and will return to 4% in 2024.
