Russia hikes interest rate for 4th time this year as inflation persists
MOSCOW (AP) — Russia’s Central Bank on Friday raised its key lending rate for the fourth time
It said seasonally adjusted price growth in the third quarter exceeded an annualized 12% and inflation for the year is expected to be about 7%. The bank said it expected inflation to fall to about 4% in 2024.
Raising interest rates is intended to impede inflation by increasing the cost of borrowing and encouraging savings.
“Steadily rising domestic demand is increasingly exceeding the capabilities to expand the production of goods and the provision of services. Inflation expectations remain elevated. Lending growth paces are invariably high,” the bank said.
Sanctions imposed over Russia’s military operation in Ukraine and the ruble’s exchange value, which has dropped about 25% against the US dollar this year.