For the first time since 2018, the Russian Central Bank raised its key rate by 0.25 percentage points – to 4.5 percent per annum.

In the release, the decision to raise the rate is justified by the too high – in comparison with the forecast – level of consumer price growth in the first quarter. Meanwhile, domestic demand is recovering faster than expected, and in some sectors of the economy the recovery is outstripping the pace of output growth.

It is also noted that inflationary expectations of the population remain at an elevated level, which creates additional risks of rising prices. “The rapid recovery in demand and heightened inflationary pressures make it necessary to return to a neutral monetary policy,” the statement said.