Russian Central Bank's Bold Rate Spike

Russian Central Bank Governor Elvira Nabiullina announced a significant key rate hike to 21%, the highest since 2003. Three options were considered, but holding the rate wasn't one of them. Future hikes remain possible, depending on economic data, inflation expectations, and credit growth.

In a bold financial maneuver, Elvira Nabiullina, the Governor of the Russian Central Bank, declared an increase in the bank's key interest rate to 21%—a peak not reached since February 2003. This decision was unveiled during a press conference on Friday and translated by Reuters from Russian into English.

Discussing the decision-making process, Nabiullina revealed that three potential rate options were on the table: a rise to 20%, 21%, and beyond. Notably, maintaining the current rate was entirely off the agenda, as every board member leaned towards a rate increase.

Looking ahead, Nabiullina suggested that additional rate hikes could occur in December. However, their realization will hinge on forthcoming data regarding the economy's progression, inflation, inflation expectations, and the overall rate of credit growth.

(With inputs from agencies.)