Russian central bank holds interest rate at 21% despite business backlash

The decision has brought criticism from influential business figures, who say high rates are hindering business activity and preventing growth.

Transcript

00:00Russia's central bank has announced its decision to hold its benchmark interest rate at 21

00:06percent, despite fierce criticism from influential business leaders.

00:12It comes as Russia continues to struggle with high inflation, brought on by military spending

00:18on the Kremlin's war in Ukraine, alongside labor shortages and large enlistment bonuses.

00:25The bank justified its decision by saying that credit conditions had tightened more

00:30than envisaged by the October rate hike.

00:34The decision has put Russian President Vladimir Putin in a difficult position, as many of

00:39those criticizing the move come from within the Kremlin itself.

00:44A growing misalignment between the president and the central bank is also becoming increasingly

00:49evident.

00:50Some experts believe that the central bank could start using certain tools that are not

00:59related to raising the key interest rate more effectively and earlier.

01:02Yes, the Central Bank started doing it somewhere in the summer, but, I repeat, these experts

01:08believe that it could and should have been done earlier.

01:13However, despite an inflation rate of 9.3 percent, Putin insists the country's economic

01:19situation is stable.