The Central Bank of Russia today raised the policy rate from 19% to 21%.

That’s assuming (1) adaptive expectations, and (2) the inflation rate is accurately measured. (h/t Anders Aslund) One might suspect that y/y inflation through September was actually higher than the reported 8.6%, but who knows. (The Central Bank has an October estimate of expected inflation of 13.4%, via TradingEconomics – I’ll take their word for it, as I can’t read Russian so I don’t know the characteristics of this estimate.)

Interestingly, while Russian GDP is expected to hit 3.5% growth this year, BOFIT’s forecast is for 1% in 2025 and 2026 (IMF October WEO indicates 3.6% for 2024, 1.3% for 2025). These forecasts predate the increase in policy rates today (although presumably they were to some extent anticipated).