Russia Monetary Policy December 2022

Russia: Central Bank stays put again in December

At its meeting on 16 December, the Central Bank of the Russian Federation (CBR) held its key policy rate stable at 7.50%. This marked the second consecutive hold and came in line with the expectations of our panelists.

Growing pro-inflationary risks underpinned the Banks decision. Although headline inflation eased to 12.0% in November (October: 12.6%), inflation expectations among households and businesses remained elevated in December, while inflationary risks rose and prevailed over disinflationary risks. According to the Bank, “this comes as a result of rising inflation pressures from the labour market, worsening foreign trade conditions and a softer fiscal stance.” Notably, the Bank highlighted that “the influence of factors that increase core inflation is increasing and this trend will continue next year.”

Meanwhile, the economy slipped into recession in Q3, chiefly due to an extremely challenging external environment amid the economic fallout from the war in Ukraine. That said, the CBR asserted that high-frequency indicators point to an expansion in business activity in the fourth quarter, which likely pushed the Bank to shift its focus partly from the economy to inflation. Moreover, the Bank expects additional fiscal easing by the government to support economic activity next year.

The Bank maintained a neutral tone in its communique, suggesting that future monetary policy decisions would depend on incoming data. However, policymakers reportedly considered giving a tighter signal, with Central Bank Governor Nabiullina stressing prevailing inflationary risks in the short and medium term. The CBR stated that it still expects inflation to come back to its 4.0% target level in 2024, but did not provide any further GDP or inflation forecasts.

The Banks next meeting is scheduled for 10 February 2023.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest