All articles tagged with #bank of russia
The Bank of Russia cut its key rate to 14.25% from 14.5% but warned that inflation risks remain due to expanded budget spending and a fuel crisis triggered by Ukrainian drone strikes. Petrol shortages and price spikes are fuelling inflation expectations, prompting policymakers to keep monetary policy tight for longer even as the economy slows.
Elvira Nabiullina’s prolonged public absence has sparked speculation about who would succeed her when her term ends next June, with officials weighing a potential shake-up of the Bank of Russia’s powers and possible successors such as Maxim Oreshkin or Pyotr Fradkov. Nabiullina returned to cut the key rate to 14.25%, but Putin’s backing remains unclear on whether she stays, as Moscow contends with the wartime economy, inflation pressures and sanctions.
Russia faces an unprecedented labor shortage after FinExpertiza data show the labor reserve shrinking by about 2.5 million since the 2022 invasion, a figure Bank of Russia chair Elvira Nabiullina publicly confirmed. The shrinking pool is driving wage pressures while industry cuts and lower production persist, as emigration and demographic decline deepen the squeeze. In response, the state is leaning on automation, retraining, and the gig/self‑employment push, but analysts warn that without sustained productivity growth of around 3–4% annually the gap will widen.
The Bank of Russia unexpectedly raised interest rates by 200 basis points to 15%, marking the fourth consecutive increase, in response to a weak rouble, persistent inflation, and increased government spending. The central bank has raised rates by a total of 750 basis points since July. Inflationary pressures have exceeded the bank's expectations, driven by high lending growth and domestic demand outpacing the provision of goods and services. The bank acknowledged that it may not achieve its 4% inflation target next year and forecasted year-end inflation for 2024 at 4-4.5%. The decision caused the rouble to surge against the dollar.
The Russian rouble briefly weakened past 100 against the dollar before recovering slightly, as foreign currency outflows and a shrinking current account surplus weighed on the currency. The rouble's previous slide into triple digits in August prompted an emergency rate hike by the Bank of Russia, and authorities discussed reintroducing controls to support the currency. Despite the recovery, analysts expect the rouble to face continued pressure in the absence of new support measures.
Three people were killed and buildings were damaged in a large-scale air attack on Ukraine's Lviv and Volyn regions. The Bank of Russia raised its key rate to 12% as the rouble dropped to its lowest level in 17 months. Reddit was fined for not deleting "banned content" about Russia's military campaign in Ukraine. Three Bulgarian nationals suspected of spying for Russia were arrested in the UK. Ukraine's president called for a ban on Russian athletes in international competitions after strikes destroyed a sports facility. Mali's military leader spoke with Russian President Putin about the coup in Niger. The US warned that a Russian arms deal with North Korea would violate UN resolutions. Sweden announced a military aid package worth over $300m for Ukraine. Ukraine plans to build new fortifications on its border with Russia and Belarus. President Zelenskiy visited troops fighting against Russian forces in Zaporizhzhia. Russia and North Korea advocated closer collaboration, including in the defense sector.