Bank of Russia Raises Rate by 2% to 21%, Exceeds Forecasts Amid Surging Inflation

Oct 25, 2024, 10:44 AM

The Bank of Russia raised its key interest rate by 2 percentage points from 19% to 21%, the highest level since 2003, in an effort to curb surging inflation. The central bank's decision exceeded economists' expectations of a 20% rate, with nine of thirteen economists predicting the lower figure, while matching Sberbank analysts' projections. Policymakers are struggling to contain rapid price growth amid increased military spending for the ongoing war in Ukraine. This rate hike surpasses levels seen after the initial economic turmoil following Russia's invasion of Ukraine in 2022. The interest rate had been systematically decreasing since peaking at 150% in 1998.