OREANDA-NEWS  The Board of Directors of the Bank of Russia on Friday decided to raise the key rate by 100 bps to 13%.

Analysts disagreed about the possible decision of the regulator. Some experts believed that the Bank of Russia would keep the key rate at 12%. A number of economists were waiting for the Central Bank to raise the rate by 100-200 basis points (bp) - up to 13-14%.

The Central Bank increased the forecast for the average key rate until the end of 2023 to 13.0-13.6% from 8.5-9.3% in July, follows from the medium-term forecast published following the results of the reference meeting. The forecast for the average key rate in general for 2023 has been raised to 9.6-9.7% from 7.9-8.3% in July.

In addition, the Bank of Russia has significantly increased the forecast for the trajectory of the key rate for 2024 - to 11.5-12.5% from 8.5-9.5% in July. The regulator has narrowed the forecast for the average rate for 2025 to 7.0-8.0% from 6.5-8.5%. The forecast for 2026 is maintained at the level of 5.5-6.5% (this level is estimated as neutral).

On August 15, the Board of Directors of the Bank of Russia at an extraordinary meeting decided to raise the key rate by 350 basis points (bp) to 12.00% per annum. The measure was taken in order to limit the risks to price stability, the regulator explained.

Earlier on July 21, the Bank of Russia decided to raise the key rate by 100 basis points at once - up to 8.5% per annum. Then the decision to raise the rate was made for the first time since February 2022, when the increase occurred from 9.5% to 20%. After that, until September, decisions were made either to reduce or to maintain the rate, and since September it has remained at 7.5% per annum.