Russian central bank warns higher rates may be needed to bring inflation to target

MOSCOW (Reuters) – Russia’s central bank issued a hawkish signal on Tuesday, just over a week before it is next due to set interest rates, warning that pro-inflationary risks of growing consumer demand and a weakening rouble could require tighter monetary policy.

The bank is determined to bring annual inflation back to its 4% target in 2024 and sees inflation ending this year at 4.5%-6.5%. Inflation spiked to double-digits in 2022.

The bank gradually reversed an emergency rate hike to 20% soon after Russia sent troops to Ukraine in February 2022, but has held its key rate at 7.5% since September. Its next meeting is due on June 9.

(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Gareth Jones)