OREANDA-NEWS On February 28, the Central Bank of Russia raised the key rate to 20%. The decision is explained by the external conditions for the Russian Federation, which have recently "changed dramatically". According to the Central Bank, an increase in the key rate will make deposits in banks more profitable. This will help the population to compensate for the risks of falling ruble and inflation. At 16.00 Moscow time, the head of the regulator Elvira Nabiullina will comment on the decision of the Central Bank.

The Central Bank promised to make further decisions on the key rate based on an assessment of external and internal risks. The regulator will also look at the reaction of financial markets and the development of the economy.

The Central Bank raised the key rate immediately by 11.5 percentage points. Over the past two weeks, the indicator has been 9.5%. The Central Bank has gradually raised the key rate since the beginning of the coronavirus pandemic in order to fight inflation.

The key rate of 20% is even higher than in 2014 after the annexation of Crimea and the beginning of the conflict in the Donbas. Then the indicator peaked at 17%. After that, it declined until the beginning of the coronavirus pandemic.

After the start of the military operation in Ukraine, the head of the State Duma Committee on the Financial Market, Anatoly Aksakov, allowed a sharp increase in the key rate. He explained that due to the fall of the ruble, imported goods that are supplied to Russia will become more expensive. This will affect inflation, the deputy said.