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Russia Puts Rate-Cutting Cycle in Question With Hawkish Hold

  • Nabiullina says shift to neutral policy more likely next year
  • Central bank warns government plans will push inflation higher
Updated on

Russia extended its pause in monetary easing as the central bank struck a surprise hawkish tone and warned that it’s slowing a shift to looser policy because of fiscal plans unveiled by the government.

Policy makers in Moscow kept their key interest rate at 7.25 percent, according to a statement on Friday. The central bank said the balance of risks has become “pro-inflationary,” boosting its inflation forecast as a result of government measures such as a plan to raise value-added tax. Nomura International Plc called the decision a “hawkish hold.”