© Reuters. A Russian state flag flies over the Central Bank headquarters in Moscow, Russia, August 15, 2023. A sign reads: “Bank of Russia”. REUTERS/Shamil Zhumatov
MOSCOW (Reuters) – All members of the Bank of Russia’s board of directors agreed that inflation pressure was gradually easing as they held rates at 16% this month, the central bank said on Tuesday, but they also considered hiking borrowing costs even higher to 17%.
The bank on Feb. 16 opted to leave borrowing costs unchanged after five successive rate hikes since last summer, though it is still grappling with stubborn inflation pressure and said in a report it had discussed risks that may keep inflation high for a prolonged time.
Tuesday’s report was a detailed summary of the board’s discussions when choosing to hold rates, giving extra insight into the Bank of Russia’s decision making.
The tight labour market and worker shortages remained one of the key discussion points, the bank said. Other subjects of discussion were inflationary risks to the Russian economy of a faster fall in oil prices as countries outside OPEC+ increase production and the impact of high budgetary spending.
The bank said it had considered raising rates by another 100 basis points, but added that some board members think the bank may be able to start lowering rates before the second half of the year, a more dovish signal.
All members agreed, the bank said, that inflation pressure was gradually easing.
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