Russia Central Bank Keeps Key Rate Unchanged At 16.00%

(RTTNews) - Russia's central bank left its key interest rate steady at its March meeting on Friday, as widely expected, as policymakers assessed inflation remains high despite a gradual easing.

The board of directors of the Bank of Russia, headed by Governor Elvira Nabiullina, decided to hold the key rate at 16.00 percent.

"For the moment, it is premature to judge the pace of future disinflationary trends," the central bank said in a statement.

"The return of inflation to target in 2024 and its further stabilisation close to 4% assume that tight monetary conditions will be maintained in the economy for a long period," the bank said.

Monetary conditions are tightening following the rate hike in the second half of 2023, the bank observed.

As per the latest preliminary official data, consumer price inflation is slowing in March, and annual inflation remains at its February level of 7.7 percent.

Inflation is forecast to ease to 4.0-4.5 percent in 2024 and to stabilize close to 4 percent further on.

The Russian economy is expected to grow rapidly in the first quarter of 2024 on the back of strong consumer activity and higher investment demand.

Over the medium term, the balance of inflation risks is still tilted to the upside, the bank said.