Russia's central bank raised its key rate by 50 basis points on Friday, citing rising inflationary expectations.
The Board of Directors, led by Governor Elvira Nabiullina decided to lift the benchmark rate by 50 basis points to 5.00 percent. Economists had forecast a quarter point hike.
The bank observed that recovery in demand is becoming more and more resilient and in a number of sectors is outstripping the possibility of increasing output. In these conditions, the balance of risks is shifted towards pro-inflationary ones, the bank said.
The bank upgraded its inflation forecast to 4.7 percent - 5.2 percent for 2021. The bank predicts the growth of the Russian economy in 2021 by 3.0 percent - 4.0 percent.
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