 "Russia")
Russia's central bank raised its key interest rate by 100 basis points to 16% on Friday, hiking borrowing costs for the fifth meeting running under stubborn inflation pressure from widespread labour shortages, high lending and the weak rouble.
"Pro-inflationary risks remain substantial over the medium-term horizon," the 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 central bank has now raised rates by 850 basis points since July, including an unscheduled emergency hike in August as the rouble tumbled past 100 to the dollar and the Kremlin called for tighter monetary policy.
Friday's decision was in line with a Reuters poll of analysts, who expect interest rates to start coming down in the spring.
The central bank's tightening cycle began this summer when inflationary pressure from a tight labour market, strong consumer demand and the government's budget deficit was compounded by the falling rouble.
Russia had gradually reversed an emergency hike to 20% which it made in February 2022 after Moscow sent its troops into Ukraine, prompting sweeping Western sanctions. It cut rates to as low as 7.5% earlier this year.
(Reporting by Elena Fabrichnaya in Moscow and Alexander Marrow in London; Editing by Mark Trevelyan/Guy Faulconbridge)
