Central Bank from December 16, again raised its key interest rate – the Russian Newspaper

The Board of Directors of the Bank of Russia from December 16, raised its key interest rate, which affects the level of interest rates on loans in the economy up to 17 percent per annum. “This decision was driven by the need to limit significantly increased in recent devaluation and inflation risks,” – said the central bank.

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Earlier, the Central Bank, the bank increased its key interest rate by one percent to 10.5 percent. During the year, the Central Bank raises key interest rate for the fifth time. Rate increase should reduce the rate of growth of consumer prices.

It was also decided to increase the maximum amount of funds to repurchase auctions in foreign currency for a period of 28 days from 1.5 to 5.0 billion dollars, as well as carrying out similar operations for a period of 12 months on a weekly basis. This was reported by RIA Novosti.

The question of the key rate was central to the members of the Board of Directors of the Central Bank in connection with the minimum rate of inflation and the rapid weakening of the ruble. Council meetings are held at historic highs against euro and the dollar.

key rate determines the cost of borrowing money in the economy, its increase weakens economic activity. The higher key rate, the more expensive loans and lower business activity.

“This is the right decision regulator! Last week, we assumed that the Central Bank will have to raise its key interest rate to 16-18 percent, but it is unclear at what point it happen (in the coming days or six months), – says Deputy Director General for Investment Analysis “Zerich Capital Management” Andrey Vernikov. – Given that early next year, no large payments on corporate foreign debt, the Central Bank has the opportunity to stabilize the situation in foreign exchange market and strengthen the ruble “.

According to the expert, ideally now have to spend massive currency intervention. In addition, it is necessary to take decisions that would prohibit economic operators, not related to foreign trade, have foreign currency accounts.