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Bank of Russia Tightens Its Monetary Policy in Response to Accelerated Inflation
[Банк России Ужесточает Денежно-Кредитную Политику Из-За Ускорения Инфляции]

Author

Listed:
  • Bozhechkova Alexandra

    (Gaidar Institute for Economic Policy; Russian Presidential Academy of National Economy and Public Administration)

  • Trunin Pavel

    (Gaidar Institute for Economic Policy; Russian Presidential Academy of National Economy and Public Administration)

Abstract

At its Board of Directors meeting in June, the Bank of Russia raised the key rate for the third time since the beginning of the year, by 0.5 p.p. to 5.5% per annum. This decision was caused by an accelerated inflation triggered by reviving demand as the containment measures were being lifted, alongside the ongoing super-loose fiscal and monetary policies in the majority of countries, rising prices in world commodity markets, and increasing inflationary expectations. As seen by the results of May 2021, inflation in annual terms reached 6% and, according to our estimates, its year-end index year will be at least 5.3%, which points to a high probability of continuing monetary policy tightening.

Suggested Citation

  • Bozhechkova Alexandra & Trunin Pavel, 2021. "Bank of Russia Tightens Its Monetary Policy in Response to Accelerated Inflation [Банк России Ужесточает Денежно-Кредитную Политику Из-За Ускорения Инфляции]," Russian Economic Development, Gaidar Institute for Economic Policy, issue 6, pages 8-11, June.
    • Handle: RePEc:gai:recdev:r2160
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    More about this item

    Keywords

    inflation; monetary policy; key rate; capital outflow; Bank of Russia;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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