Russian Central Bank has increased key interest rate up to 8%

Such measures are taken to fight against inflation.

30.Jul.14 10:54 AM
By Mikhail Prygunov
Photo telegrafist.org

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Russian Central Bank has increased key interest rate up to 8%

Central Bank board of directors held a meeting where it was decided to increase key interest rate up to 8%. It used to be 7.5%.

Central Bank has already increased this rate during the current year. It has been increased by 1.5% on the 3rd of March 2014 from 5.5% up to 7%. Later it has also been increased by 0.5% on the 25th of April. Experts were sure that this rate would not be increased in the nearest future. Developing inflation is the main factor for such increase along with funds outflow form consumer market and current economic situation on financial market. We should also consider sanctions against Russia along with indecisive actions against implemented limitations. The last factor was believed to be the main reason for leaving the interest rate on 7.5% level.

At the same time there is another reason for such increase. It deals with idea of spending the Reserve Fund instead of increasing tax rate. That is why such measures will help to deal with growing inflation level.

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