The Central Bank of Russia today raised the policy rate from 19% to 21%.
That means (1) expectations are flexible, and (2) the rate of inflation is accurately measured. (h/t Anders Aslund) One might suspect that inflation for the year to September was actually higher than the reported 8.6%, but who knows. (The Central Bank has an October estimate of expected inflation of 13.4%, via TradingEconomics – I’ll take their word for it, as I can’t read Russian so I don’t know the details of this estimate.)
Interestingly, while Russia’s GDP is expected to grow by 3.5% this year, the BOFIT forecast is 1% in 2025 and 2026 (IMF October WEO shows 3.6% in 2024, 1.3% in 2025). These predictions preceded today’s policy rate hike (although they were probably somewhat anticipated).
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