The expert predicted the key rate increase to 23%

At the last meeting of the year, the Central Bank (CBR) is likely to raise the key rate again. The most likely option is up to 23%. Alexei Kornev, portfolio manager of Alfa Capital Management Company, told Izvestia on December 17.

He emphasized that the regulator is unlikely to ignore the inflation figures for the last month and a half.

"However, the statistics on inflation rather reflects the past state of affairs. If we talk about future price dynamics, we cannot but note that credit impulse sharply contracted in November. According to the Central Bank's prompt estimate, the retail loan portfolio shrank by 1.7% over the month, after growing by 0.4% in October (annual growth slowed to 11.1% from 14.9%). And, even more importantly, the pace of corporate lending declined - over the month the portfolio grew by only 0.8% after 2.3% in October, and annual growth slowed to 20.3% from 21.8%," Kornev said.

He noted that loans are a source of demand, so it is likely that following the reduction in lending, inflation will gradually stabilize. For this reason, raising the rate to 25% seems unnecessary. Especially since spreads of lending rates and yields on bond offerings relative to the key rate have widened significantly recently. Companies are already borrowing at rates much higher than 21%, the expert pointed out.

"With such a balance of positive and negative data, an increase of 1 or, more likely, 2 percentage points seems to be the most balanced decision. At the same time, we do not rule out that the rate hike in December may be the last in this cycle of monetary tightening. Perhaps, the Central Bank will also use a softer signal at the December meeting," Kornev concluded.

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Earlier, December 13, the former head of the Central Bank, Sergei Dubinin, said that the regulator may raise the key rate to 22% at the end of the meeting on December 20. He recalled that he had said many times that the increase in the key rate itself does not bring instant results in the fight against inflation.

Prior to that, on November 28, Kirill Tremasov, Advisor to the Chairman of the Bank of Russia, said that the regulator will consider the issue of raising the key rate at a meeting on December 20. At the same time, VTB Deputy Chairman of the Board Dmitry Pianov said that the bank's analysts predict an increase in the key rate to 23%.

October 25, the Central Bank Board of Directors raised the key rate to 21%. Then, on November 19, the head of the regulator Elvira Nabiullina said that if Russia does not face additional economic shocks, in 2025 the Central Bank will be able to start reducing the key rate.