"The key factor here is foreign trade. We still have an open economy and the current account balance is still key," she said. Danilova explained that the weakening of the exchange rate is due to a decrease in the positive current account balance.
According to Danilova, the weakening of the ruble has also become one of the factors driving inflation. She added that the Russian labor market has a very low unemployment rate, rapid wage growth, and other factors. This "spurs" price growth in the economy, Danilova noted.
At a meeting on October 25, the Bank of Russia's Board of Directors decided to raise the key rate by 200 bp to 21% per annum. According to the regulator's position, further tightening of monetary policy is required to ensure inflation returns to the target (4%) and reduce inflation expectations.
