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Bank of Russia Keeps Tightening the Monetary Policy

Alexandra V. Bozhechkova – Head of Monetary Policy Department of the Gaidar Institute for Economic Policy; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute for Economic Policy; Director of Center for Central Banks Studies of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In September, the Central Bank of Russia’s Board of Directors took a decision to tighten the monetary policy. The key interest rate was raised by 0.25 p.p. to 6.75% per annum, the maximum value since December 2019. Such an increase was substantiated by intensified inflationary pressures on the back of expansion of demand amid existing problems related to supply of goods and services, as well appreciation of global prices. From results for August 2021, year-on-year inflation amounted to 6.7%, close to the 5-year heights. In our opinion, in 2021 the inflation rate is going to be equal to over 6% and this suggests further tightening of the monetary policy.

Key words: inflation, monetary policy, key rate, capital outflow, Bank of Russia.

JEL-codes: E31, E52, F31.