Russia economic dynamics

The Central Bank of Russia unexpectedly cut its key interest rate by 300bps to 17% on 8th April, taking the decision ahead of its next scheduled policy meeting set for 29th April. External conditions for the Russian economy are still challenging, but have ceased to increase for the time being, including owing to the adopted capital control measures.

The CBR holds open the prospect of further key rate reduction at its upcoming meetings. Market expectations are that the key interest rate could be reduced by another 100-200bps by end-April. Annual inflation in Russia was reported at 16.69% as at 1st April, up from 15.66% a week earlier (February: 9.15%). The CBR noted that the temporary strengthening of the rouble in recent weeks has helped to slow down the pace of current price growth rates. Market expectations are that inflation could potentially peak at 24%-27% by mid-2022.

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Russia Economic Updates 11.04.2022
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