Russian Central Bank Holds Rates Steady Despite Inflationary Pressures

Russia's central bank has warned of inflationary pressures due to the falling ruble and record labor shortage. While policymakers kept interest rates steady at 7.5%, they signaled an increase may be coming soon. The central bank has projected inflation to accelerate to 4.5%-6.5% by the end of the year, up from 3.5%. The ruble has tumbled against the dollar by about 14% so far in 2023, making imports more expensive and stoking inflation further. The labor shortage has also contributed to a sharp drop in Russia's industrial production.