At a press conference following a board meeting of the Bank of Russia, Governor Elvira Nabiullina stated that Russia’s very high interest rates would remain high for longer than had previously been expected. “With the current balance of factors, sustainably achieving the inflation target will require a higher key rate trajectory than previously expected.” After announcing a small 0.5% reduction in the rate down to 16.5%, Nabiullina announced that “a decision on the next rate cut will require additional evidence confirming that further progress can be made without the risk of persistent inflation rising above the target level in 2026.”
This policy of monetarist “inflation targeting,” so dear to the hearts of IMF bureaucrats, is heavily criticized by those in Russia, such as economist Sergey Glazyev, who favor a policy of generous directed credit for productive investment, and not for international exchange-rate speculation.
