The Board of Directors of the Bank of Russia kept the key rate at 20%.

“The Russian economy is entering a phase of large-scale structural adjustment, which will be accompanied by a temporary but inevitable period of higher inflation, mainly related to the adjustment of relative prices for a wide range of goods and services. The monetary policy pursued by the Bank of Russia will create conditions for gradual adaptation of the economy to the new conditions and return of annual inflation to 4% in 2024,” the Central Bank said.

The regulator notes that a significant increase in deposit rates has restored the inflow of funds to term ruble deposits and stabilized the demand for cash. Now the monetary policy of the Central Bank “supports the attractiveness of deposits and increases the propensity of the population to save”.

The Bank of Russia did not publish a new inflation forecast, specifying that “business adaptation to the changed external conditions, including the restructuring of production and logistics chains, will be a determining factor affecting the dynamics of relative prices on the horizon of the coming quarters”.

Experts were expecting the Central Bank to keep the rate – the majority of Bloomberg consensus forecast participants were in favor of such a decision.

“Before raising the rate further, the Central Bank needs time to evaluate the effect of the increase that has already occurred”, – said earlier macro analyst of Raiffeisenbank Stanislav Murashov.