The Central Bank of Russia surprisingly raised the key rate on the ruble to 8%. The increase was half a percentage point. The decision was motivated by geopolitical tensions which are increasing inflationary risks.
The institute explained in a note that "inflationary risks have increased, also due to geopolitical tensions and their possible effects on the dynamics of the exchange rates of the national currency, as well as potential changes in fiscal and tariff policy".
The reference is to the crisis in Ukraine and to the new Western sanctions against Moscow. "If the high inflationary risk persists - concludes the note -, the Bank of Russia will continue to increase the reference rate".
