Russia's central bank raises the key interest rate again - expert gives outlook

Russia's central bank raises the key interest rate again - expert gives outlook

According to a report by www.tagesschau.de,

The Russian central bank has once again raised the key interest rate to combat inflation and prevent another ruble collapse. Since July, the central bank has raised the key interest rate by a total of 8.5 percentage points. In November, the inflation rate reached 7.5 percent, while the target is only four percent. The central bank expects inflation in 2023 to be near the upper limit of the forecast range of 7.0 to 7.5 percent. Experts disagree about what will happen next in terms of monetary policy. Some expect further tightening, while others believe that the tightening phase has already been completed.

Now, given the ongoing threat of inflation and increases in defense spending, there could be further unrest in the market. The high inflation rate could affect consumers' purchasing power and lead to a reduction in private spending. At the same time, increasing defense spending could contribute to a further rise in prices, which would place additional strain on the economy. The uncertainty about the future monetary policy line and the country's economic development could also lead to increased volatility on the financial markets. It therefore remains to be seen how the situation in Russia will develop and what impact this could have on the global economy.