In line with expectations, the Russian Central Bank maintained its benchmark interest rate on Friday at 7.5% in an effort to sustain the domestic economy in the face of a global trend toward higher borrowing costs.
The main interest rate is unchanged for the first time since the start of the military action in Ukraine.
The central bank drastically increased the primary interest rate from 9.5% to 20% in an effort to combat inflation after being subjected to Western sanctions as a result of the Ukrainian crisis.
The bank gradually lowered the interest rate over the ensuing months in response to encouraging signs for the overall economy, and the markets anticipated that it would hold the rate at 7.5% on Friday. According to the Bank of Russia, there has been a “further reduction in annual inflation” and it is predicted that by the end of 2022, inflation will be between 12 and 13%.
On September 21, Russian President Vladimir Putin announced the call-up of hundreds of thousands of reserve soldiers; on Friday, the Russian Defense Ministry announced the mobilisation of 300,000.
According to the bank, there are also “growing labour market limitations, driven by part of partial mobilisation. According to the central bank, the GDP is predicted to decline by 3% to 5%.
For the first time since the war, Russia demonstrates interest rates.
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