Inflation Memory Is What Keeps Russia's Real Rates World-Beating

Russia's central bank is keeping rates high in the midst of recession to shore up its credibility

What's "moderately tight" in Russia would be choking in most other places on the globe. Except in Belarus.

At 5.5 percent, Russian real interest rates are the second-highest in the world, according to the investment arm of the country’s biggest lender, Sberbank CIB. While most economies with restrictive rates have them because they're expanding briskly, recession-hit Russia would benefit from easier monetary policy. But inflation running at almost twice the central bank's 4 percent target is feeding memories of runaway price growth that started after the collapse of the Soviet Union.

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