OREANDA-NEWS. Following the meeting of the Board of Directors, the Bank of Russia raised its key rate for the fourth time in a row, this time by one percentage point at once - to 6.5% per annum.

Thus, the indicator returned to the level of October-December 2019.

The regulator's decision was the most "hawkish" since December 2014, when it urgently changed the rate by 6.5 percentage points at once - to 17% per annum against the background of a sharp weakening of the ruble and high inflationary risks.

The central bank this spring moved to normalize monetary policy, starting to raise the key rate. Initially, he increased it by 0.25 percentage points - up to 4.5% per annum, and then twice - by 0.5 percentage points, up to 5.5% per annum.

In June, the regulator also tightened the signal for a further rate hike, announcing the need for such a step at the next meetings. Later, the head of the Central Bank Elvira Nabiullina said that an increase of 0.25-1 percentage points would be considered in July.

The need to increase the rate at the Central Bank was explained by accelerated inflation and high inflationary expectations.

In addition, the Bank of Russia raised its expectations for the key rate on average for 2021 to 5.5-5.8% from 4.8-5.4%. At the same time, from July 26 to the end of the year, it is forecasted in the range of 6.5-7.1%.