A recent poll conducted by Russia's central bank revealed that analysts are predicting year-end inflation to reach 7.3%, significantly higher than the targeted 4%. This news comes on the heels of the central bank's decision to raise its key interest rate to a staggering 18% in response to soaring inflation.
According to the analysts surveyed, the average key rate for the remainder of the year is expected to be 19%, indicating that another rate hike may be on the horizon before the year is over.
Analysis:
This news of rising inflation and potential interest rate hikes in Russia can have a significant impact on the country's economy and financial markets. Higher interest rates can lead to increased borrowing costs for businesses and consumers, potentially slowing down economic growth. Additionally, inflation erodes the purchasing power of the currency, making goods and services more expensive for consumers.
Investors should closely monitor the central bank's upcoming rate-setting meeting on Sept. 13 to gain insights into the bank's monetary policy decisions and how they may affect investment opportunities in the Russian market. It is crucial to stay informed and adapt investment strategies accordingly to navigate the changing economic landscape.