MOSCOW: Russia will probably need to keep interest rates high throughout 2024, the Bank of Russia’s Deputy Governor Alexei Zabotkin said on Tuesday, addressing the upper house of parliament after the rouble weakened back past 100 to the dollar.

The central bank raised interest rates to 13% last month, following an emergency 350-basis-point rate hike to 12% in August, as Russian authorities seek to halt rouble weakening that feeds into already stubborn inflationary pressures.

Russian central bank says rates will need to stay high as it hikes to 13%

“In the last three months, we have undertaken significant monetary policy tightening, raised the rate to 13%,” Zabotkin told the Federation Council. “To return inflation to the 4% target, tight monetary policy will probably need to be maintained throughout next year.”

Analysts polled by Reuters expect the central bank to hike rates again at its next scheduled meeting on Oct. 27.

The Bank of Russia’s baseline forecast for the average rate range in 2024 is 11.5-12.5%. The range is seen returning to the neutral 5.5-6.5% in 2026 as inflation eases.

Zabotkin said monetary policy aimed at reducing inflation would increase the attractiveness of the rouble and contribute to the exchange rate stabilising. He said the rouble’s weakening was boosting the population’s inflation expectations.