Page 64 - Russia OUTLOOK 2024

• 4.2 Monetary Policy
The board of the CBR resolved to hike the key interest rate by 100 basis points to 16% at the last December 15 policy meeting of 2023, marking a fifth consecutive key rate hike. (chart)
As followed by bne IntelliNews, a hike of 100bp to 16% was a broad consensus expectation as the CBR was forced to play catch up with persistently high inflation for the third meeting in a row. In less than five months the key rate has more than doubled from 7.5% to 16%. Russia’s interest rates are now higher than Ukraine’s 15%.
Analysts anticipate a higher trajectory of the key rate over the entire forecast horizon, according to the CBR’s December macroeconomic survey.
They have raised their expectations to 9.9% per annum (+0.1 pp) on average in 2023, 0% per annum (+1.4 pp) on average in 2024, 9.0% per annum (+0.8 pp) on average in 2025, and 7.0% per annum (+0.5 pp) on average in 2026. Analysts’ median estimate of the neutral key rate has risen to 6.5% per annum (+0.5 pp), the CBR reports.
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