Russian Central Bank Hikes Key Interest Rate to 15% to Fight Inflation and Weak Ruble

The Bank of Russia hiked interest rates by 200 basis points to 15% on Friday, the 4th hike this year to combat high inflation and a weak rouble.

The central bank acknowledged it may not hit its 4% inflation target in 2024, forecasting 4-4.5% instead.

Governor Elvira Nabiullina said the budget deficit was a factor in the decision as Russia ramps up military spending.

Nabiullina said rates could climb further and more hikes may be required if inflation does not slow.

The central bank withdrew guidance on further hikes but kept policy tight, signaling rates will stay high for a prolonged period.