Russia to raise interest rates in light of high inflation

Elvira Nabiullina, Governor of the Russian Central Bank, said on Thursday that inflation is rising faster than expected, and hinted that the bank is likely to raise interest rates later this month.

She added at a conference that, “In July, the agenda will include a discussion of raising interest rates.” I believe that the main topic of discussion will be the step to raise interest rates, noting that “raising interest was an inevitable result, and that the extent of the rise is the only remaining question.”

Prices have risen significantly in Russia since it launched its military attack on Ukraine in February 2022 and the Kremlin has dramatically increased spending on its military and arms producers.

The rise in public spending coupled with record labor shortages in many sectors created an inflationary spiral that swept the country over the past year.