Page 124 - RusRPTJul24

requirements for companies to scrutinise their subsidiaries and supply chains are also being considered.
The SPFS was launched in test mode in 2014 following Russia’s annexation of the Crimea and in anticipation of extreme sanctions. It became fully operational in 2017 and has grown since then as Russia pushed its partners to adopt the system to bypass the widespread use of SWIFT. As of March 2024, the central bank reported that the system had 556 participants from 20 countries. Sanctions banning Russia's use of SWIFT were imposed only days after Russia’s invasion of Ukraine in February 2022.
8.2 Central Bank policy rate
The Bank of Russia has again kept its key rate at 16% per annum, though it holds open the prospect of increasing it at the upcoming meeting, the regulator said in a press release.
"On 7 June 2024, the Bank of Russia Board of Directors decided to keep the key rate at 16.00% per annum. The current price growth rate has stopped decreasing and remains close to the levels of 2024 Q1. Growth in domestic demand is still outstripping the capabilities to expand the supply of goods and services. The Bank of Russia holds open the prospect of increasing the key rate at its upcoming meeting. Furthermore, returning inflation to the target will require a significantly longer period of maintaining tight monetary conditions in the economy than it was forecast in April," the regulator said.
Annual inflation will return to the target in 2025 and will be close to 4% in the future; the current rate of price growth has stopped decreasing and remains close to the values of the first quarter of 2024, follows from the press release of the Central Bank of the Russian Federation following the meeting of the board of directors.
"The Bank of Russia holds open the prospect of increasing the key rate at its upcoming meeting. Furthermore, returning inflation to the target will require a significantly longer period of maintaining tight monetary conditions in the economy than it was forecast in April. According to the Bank of Russia’s forecast and given the monetary policy stance, annual inflation will return to the target in 2025 and stabilize close to 4% further on," the regulator said.
Over the medium-term horizon, the balance of inflation risks has shifted even more towards proinflationary ones, the Central Bank noted. "The key proinflationary risks are associated with changes in terms of trade (including as a result of geopolitical tensions), persistently high inflation expectations and an upward deviation of the Russian economy from the balanced growth path,"
124 RUSSIA Country Report July 2024 www.intellinews.com