The Monetary Policy and Inflation Rate : The Outcomes of 2020

Based on the results of 2020, amid crisis conditions the inflation rate sped up to 4.9%, an increase of 0.9 p.p. over the Russian Central Bank’s inflation target. In H1 2020, on the back of a large-scale reduction in consumer demand the inflation rate was below the target. In H2, proinflationary factors picked up. After gradual reduction in the key interest rate from 6.25% in January 2020 to 4.25% per annum in July 2020, the Central Bank of Russia suspended the easing of the monetary policy. In H1 2021, the inflation rate will keep speeding up, however, by our estimates, it will be close to the Bank of Russia inflation target by the year-end