Bank of Russia keeps key rate at record 20%

The Bank of Russia (the Central Bank), as expected, has kept the key rate at a record level of 20% per annum, Report informs citing RIA Novosti.

The Central Bank last year fought against rising prices in the country with the help of its main weapon - the key rate. In total, in 2021, the regulator raised the rate seven times, by a total of 4.25 percentage points, and at the beginning of this year by another 1 percentage point, to 9.5% per annum. At the same time, the regulator hinted that it could continue to smoothly raise the rate if necessary, to fight inflation.

However, geopolitics intervened in the gradual process of tightening monetary policy: on February 24, Russia launched military actions in Ukraine. In response, Western countries began to impose sanctions, which led to a sharp depreciation of the ruble and high volatility in the markets. As a result, the Central Bank decided to urgently raise the key rate by 10.5 percentage points to 20% per annum.