The Central Bank of Russia (CBR) held its key interest rate unchanged at the record high of 21% in its December meeting, surprising markets that expected a 200bps rate hike to 23%.
The decision took place following reports that CBR Governor Nabiullina recently talked with President Putin, who called for a 'balanced' decision, and Russian business leaders, who have been vocal against high interest rates despite soaring inflation.
The central bank is independent by law, but analysts said the pressure from business had become too strong to ignore. "The pressure ... worked, and the central bank decided to stop," said economist Evgeny Kogan according to Reuters. The current rate is still the highest since the early years of Putin's rule, when Russia was recovering from the economic chaos of the 1990s.
The central bank cited low credit activity as the warrant for the pause in rate hikes, but reiterated that underlying inflation continued to rise amid higher expectations from households and business, driving the bank’s inflation forecast to rise for 2025 and 2026.
The central bank also noted that the significant weakening of the ruble, unbalanced budget spending, and the ongoing labor force crisis contributed to soaring inflation. November data showed that annual headline inflation was at 8.9%, but early forecasts from the CBR have December's print near 9.5%, translating to the highest since February 2023.
I wonder how long till the middle class, many of whom are unfortunately fine with the least fortunate only being in a desperate situation, riot from facing more and more desperation themselves. You need economic policy exactly to prevent things like riots because they are inevitable once enough people are starving that the state cannot suppress them.
I completely am opposed to the entire system by the way, of the least fortunate and those others who never were fine with these things, those who never intended harm on anyone, being forced into helpless situations. What I mean is, Russia is going to probably feel the brunt of this war for at least a decade and somewhat probably more, since out of the two countries in it they're the ones who have buried their heads into the ground and are aggressively choosing ignorance about how they're breaking up the various systems in place which were meant to ensure they can continue to lead their normal lives (which is heavily dependent, because we do not live in a world where the aspiration is to learn to be technically capable of making everything we use; that would also be impossible anyway, at least in the same scope, without a lot of cruel systems in place. Those systems themselves people either look at and acknowledge, or prefer it remains unsaid, or are outright hostile on mention with a variety of accusations of being disruptive put forth). Apparently these systems are unnecessary and Russia will transcend all.
In my opinion though, soon too many will suffer for the state to manage. And many of the rioting will also come from the thoughtless parts of the common population which supported the war fully for glory. It has always happened—they will pretend like they were among the reasonable who never had a stance on the war (if not the reasonable who opposed the war) and will play the victim when shown by random persons around to be one who excitedly cheered on the invasion.
One thing that goes unsaid is the populations who take a side out of 'helplessness' though. I live in India, a place which wants to be present day Russia and is inching there, and my own family and just about everyone in the neighborhood and broad community of the middle class have 'taken a side' already and go along with things so as to not face the circumstances which 'unwanted' rebels face. These are the people who are the 'good, ordinary, non-violent' people. The ones who do not go along with it are considered scum, even by ordinary politically natured people who are publicly 'against' these things, or are considered problematic and disruptive to peace by those who would have, in better times, been neutral (and bury their heads in the ground at thoughts like what if they were the ones who could not simply make a choice to secure safety for the immediate future; rather had no option but to suffer). The ones who really oppose the controlling powers from the core of their being are usually seen as fools and die soon enough in most cases, because it is easy to lose everything you have if you really do so more than the 'I publicly oppose but co-operate and obey' way. There is passive support for the controlling sides usually, when people come across a situation where cruelty is thrown in their face and a decision is demanded by the situation. Choosing to co-operate with the repressors is what is usually chosen. And when directly confronted by ones from that side, passive support becomes active support, as much as is deemed necessary by these people to not face problems themselves. The ones who do not side with the controlling side are guaranteed to suffer.
A few even here on beehaw turn their heads away and justify it on the basis of people feeding their families (literally not a joke), which had gone tolerated for days and probably still is despite me following the guidelines of the broad 'be(e) nice' rule, by putting forth the point of how exactly those opinions are harmful to the most helpless. Which is why I have limited my interactions here to a degree; this was supposed to be the nice place😔 I already do not interact on the broader public internet (at all) because it is much worse than this. Coming back to the actual thing I was putting here though, how do people ever expect things to not get messed up to extreme situations then, because this is what is seen among large parts of populations almost everywhere. There is a reason things fall to extreme situations. It is never as simple as 'bad ones are winning against good ones' because the ones paying full attention know this—the 'bad ones' are not capable of doing a single part of their bad deeds without some or the other form of support. And they crumble in the face of an unyielding 'no'.