Alexey Vedev on how an increase in the key rate will affect the ruble exchange rate

According to the Moskovsky Komsomolets daily, at its next meeting on June 7 the RF Central Bank is most likely to raise the key rate to 17%. This move may be related to a number of factors: inflation keeps growing, consumer lending is breaking demand records and the economy remains overheated.

According to Alexey Vedev, the key rate should be kept at that level of 16%, but the expert is confident that the Central Bank of Russia will definitely raise it. The main problem is related to the annual inflation, which does not subside and has already exceeded 8%. Retail lending rates are not slowing down either, but they may be influenced by the abolition of preferential mortgages, rather than the interest rate, the expert believes. According to Alexey Vedev, the Central Bank of Russia’s decision will not affect the ruble exchange rate: the Russian currency remains weak, otherwise (with a strong ruble) the inflation rate would decline.