Bank of Russia to release interest rate decision
The Central Bank of Russia will hold a board meeting today to set interest rates.
Russia has seen rising inflation lately—reaching 5.8% in March—driven by skyrocketing food prices and a weakening ruble. These worsening economic conditions have forced President Vladimir Putin to intervene in December by ordering price controls.
The measures taken so far have only had a marginal effect on rising inflation. It is likely rising inflation is due to an increase raw material prices spurred by optimism of strong post-pandemic economic recovery, but also by unfavorable weather conditions and supply chains weakened by the pandemic. The price of oil will most likely stabilize around $60 as the world recovers the global economic downturn. Russia—the world’s second-largest energy exporter—will see its oil and gas revenues affected in the short- to medium-term.
The Russian central bank has set itself an inflation target of 4% in the medium-term, yet the effect will continue to be felt in Moscow’s purchasing power. Inflation and rising food prices are likewise compounding dissent during a time of anti-establishment protests across Russia, possibly disrupting the Kremlin’s strategy for upcoming September legislative elections.
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