Nabiullina explained the pause in raising the key rate

The Central Bank's decision to maintain the key rate will ensure a decline in inflation in the coming quarters. This was stated by Central Bank Chairman Elvira Nabiullina on December 20.

"Today we have decided to keep the key rate at 21% per annum. The economy has formed tough monetary conditions, which should ensure a slowdown in inflation in the coming quarters," she explained at a press conference following the meeting of the regulator's Board of Directors.

She pointed out that the Central Bank took a pause in raising the key rate in order to assess the adjustment of the economy to the new conditions. In particular, she said, credit growth rates fell sharply in November and it takes time to assess the sustainability of credit cooling.

Nabiullina also emphasized that a prolonged period of tight monetary policy would be needed to bring inflation back to 4%.

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Earlier in the day, the Central Bank decided to keep the key rate at 21% per annum. It was noted that there was a more significant tightening of monetary conditions than the October decision on the key rate suggested.

Back in late October, when the rate was raised to 21%, the Central Bank allowed the possibility of further increase in the key rate. Thus, according to the regulator's forecast, annual inflation will fall to 4.5-5% in 2025 and to 4% in 2026.