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Russian policy toolkit mixes rate rises and price caps

Tuesday, July 20, 2021


This is high enough to worry the Central Bank of Russia (CBR): inflation has hovered around 4%, the bank's target level, for the last four years. The CBR has responded with monetary tightening, and the government with price controls on food and some exported commodities.


  • Rising domestic interest rates and higher global oil prices will support the ruble.
  • Elevated inflationary expectations will discourage long-term investment and personal savings.
  • Higher interest rates will improve banks' net interest income and support banking profitability in 2021.

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