Impacts of New External Shock on Russia’s Monetary Policy

Abstract

The Bank of Russia’s Board of Directors decided in April to keep the key interest rate unchanged on the heels of new sanctions on Russia that affected seriously the Russian rouble. The exchange rate pass-through to prices can guide, sooner than it was expected, inflation closer to its 4% target rate. There remain high risks of further escalation of geopolitical tension, leading to heightened uncertainty about developments on the economic scene.