Russia leaves policy rate unchanged, meeting forecasts

By Tuba Ongun

ANKARA (AA) - The central bank of Russia on Friday kept its key interest rate unchanged at 7.5% for the sixth consecutive meeting, in line with market forecast.

The bank hinted at a rate hike in its next meetings to tame inflation, saying: "Given gradually rising inflationary pressures, the Bank of Russia holds open the prospect of increasing the key rate at its next meetings to stabilize inflation close to 4% in 2024 and further on."

It expects inflation to hover between 4.5-6.5% this year before steadying at 4%.

According to the latest data, consumer prices increased 2.6% year-on-year as of July 5 after 2.3% in April, the bank said.

"Accelerating fiscal spending, deteriorating terms of foreign trade and the situation in the labor market remain pro-inflationary risk drivers. The overall balance of inflation risks has tilted even more to the upside," it stressed.