ISTANBUL
On Friday, the Bank of Russia raised its policy interest rate by 200 basis points to a historic high of 21%.
Since July 2023, the bank has hiked the rate from 8.5% to 19% up to September, with market expectations set at 20% for this meeting.
The bank noted that inflation is significantly exceeding its forecasts, and inflation expectations are rising.
It stated, “Domestic demand is growing much faster than the supply of goods and services can keep up.”
Looking ahead, the bank anticipates that annual inflation will fall to 4.5-5% in 2025 and 4% in 2026, aiming to stay on target beyond that period.
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