Market approves Central Bank’s move to keep rate at 20%

Russia’s Central Bank has decided to keep its key interest rate unchanged at 20%, in line with market expectations.


The mega-regulator said it would be making further decisions on this score depending on the inflation trends. The next Central Bank board meeting will take place at the end of April.

Market participants have mostly expressed positive views about the regulator’s decision. Igor Rapokhin, senior debt market strategist at SberCIB Investment Research, says:

“The decision to keep the rate unchanged was in line with market expectations. The Central Bank believes the rate hike to 20% on February 28, as well as the capital control measures it announced, will be enough to support financial stability: the inflow of funds to bank deposits has resumed, the demand for cash decreased, and the ruble strengthened against the dollar.”

The market also reacted positively to Russian President Vladimir Putin nominating Elvira Nabiullina for a third term as the Central Bank Governor.

You don’t change horses in the middle of the stream. Russian public finance emerged from the 2015 and 2020 crises almost unscathed,” economist Sergei Khestanov, Associate Professor at RANEPA, said. “This means the regulator’s monetary policy is correct.”

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