The Russian central bank stated on Wednesday that the recent strengthening of the rouble, which has risen by approximately 24% against the dollar and 15% against China's yuan this year, is partly attributed to geopolitical factors. The bank noted that it is premature to gauge the impact on the economy at this stage.
According to the regulator, the rouble's appreciation is a result of market reactions to geopolitical events and a seasonal decline in foreign currency demand from importers. The sustainability of this rouble surge and its implications on prices are uncertain, as indicated in the minutes from the rate-setting meeting on February 14.
A reinforced rouble could assist in curbing inflation, a significant concern for Russian authorities. The central bank maintained its interest rate at 21%, the highest level since the early 2000s, as a measure to combat inflation. Consideration was given to raising the rate to 22%, given ongoing inflationary pressures and signs of economic overheating.
The central bank anticipates that annual inflation could reach 10.6% in the first quarter of 2025 under the baseline scenario, as economic growth might dip to 2.9% from 3.3% in the fourth quarter of 2024.