Accelerating Inflation Will Require a High Key Rate in 2023-2024

Yury N. Perevyshin – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute for Economic Policy; Director of Center for Сentral Banks Studies of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Based on October results, the year-over-year inflation (for the past 12 months) has sped up to 6.7% with the level of consumer prices in October increasing by 0.83%, thus amounting to 9.7% in terms of annual growth rates of prices with seasonality adjusted. On October 27, the Central Bank of Russia raised the key rate by 200 basis points to 15.0% annually; as a result, in the current cycle of the monetary policy tightening which began on July 21, the key rate has already increased twofold. The signal of the monetary policy’s further direction was mitigated and the regulator put its future decisions in dependence on the inflation rate’s actual dynamics in the forthcoming months. The Central Bank of Russia’s updated forecast allows growth in the key rate by another 100 basis points in December and its average increase by 150 basis points in 2024.

Key words: inflation, inflation expectations, monetary policy, key rate, Bank of Russia.

JEL-codes: E31, E52, F31.