Bank of Russia Tightens Its Monetary Policy in Response to Accelerated Inflation

Банк России ужесточает денежно-кредитную политику из-за ускорения инфляции

Alexandra Bozhechkova and Pavel Trunin

Russian Economic Development, 2021, issue 6, 8-11

Abstract: At its Board of Directors meeting in June, the Bank of Russia raised the key rate for the third time since the beginning of the year, by 0.5 p.p. to 5.5% per annum. This decision was caused by an accelerated inflation triggered by reviving demand as the containment measures were being lifted, alongside the ongoing super-loose fiscal and monetary policies in the majority of countries, rising prices in world commodity markets, and increasing inflationary expectations. As seen by the results of May 2021, inflation in annual terms reached 6% and, according to our estimates, its year-end index year will be at least 5.3%, which points to a high probability of continuing monetary policy tightening.

Keywords: inflation; monetary policy; key rate; capital outflow; Bank of Russia (search for similar items in EconPapers)
JEL-codes: E31 E52 F31 (search for similar items in EconPapers)
Date: 2021
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