Russia's central bank has decided to maintain its key interest rate at 21%, emphasizing the need for tight monetary conditions as the country grapples with persistent inflation. The decision was made during a scheduled meeting on December 20, 2024, despite market expectations for an increase to 23%.
The bank noted that monetary conditions have tightened more than anticipated, driven by factors outside its control. This tightness is seen as essential for resuming disinflation processes and achieving the inflation target, despite ongoing high price growth and strong domestic demand.
In response to the announcement, the Russian stock market reacted positively, with the MOEX index rising significantly. At 13:35 MSK, the index climbed to 2543.32 points, reflecting a 5.25% increase from the previous trading session.
Analysts had predicted a potential rate hike, with most forecasting an increase to 23%. However, the central bank's decision to hold the rate steady may indicate a cautious approach to managing economic pressures.