In a significant development, Russia's Central Bank is expected to increase its key interest rate by 2% during the upcoming meeting on October 25, potentially bringing the rate to a record 21%. This forecast comes from banker Evgeny Kogan, who cited various factors contributing to this decision, including an underestimation of inflation levels.
Current projections suggest that inflation could reach 8-8.5% by the end of the year, significantly above the Central Bank's earlier estimate of 6.5-7%. The weakening of the national currency, high labor shortages, and rising household debt are also contributing to this inflationary pressure.
Kogan noted a decline in trust towards the Central Bank, prompting businesses to incorporate higher inflation expectations into their planning. Earlier reports indicated that at least 24 out of 30 surveyed experts believe the rate will rise from 19% to 20%, with some suggesting it could reach as high as 22%.