Russia's jab at Turkey: The situation in Turkey and Russia is different

The Central Bank of Russia (CBR) has raised its benchmark interest rate by 200 basis points in line with market expectations, following four consecutive meetings where it had kept the rate steady.

The Central Bank also warned that a decision on whether to raise interest rates again would be made at the meeting to be held on September 13. The Board of Directors had chosen to keep the interest rate at 16 percent in the previous four meetings.

The statement issued by the institution says, "Additional tightening measures are required for inflation to start falling again, and a tighter monetary policy than previously estimated is needed to bring inflation down to the 4 percent target."

Appearing before the press after the decision, Central Bank of Russia Governor Elvira Nabiullina said that they would not act according to the Turkey scenario and would not make sharp increases in interest rates. The Central Bank governor stated, "Russia's situation is completely different."

'OUR SITUATION CANNOT BE COMPARED TO TURKEY'

Nabiullina used the following expressions:

"Turkey is an example. Inflation there went up to 80%, it is still around 70% annually, and the interest rate remained very low for a long time, so they had to increase the interest rate in quite high steps in Turkey... Increasing the interest rate last year was effective in reducing inflation rates in the first half of the year, but additional tightness is necessary for the inflation decline process to be irreversible, but our situation cannot be compared to Turkey, so we did not consider such an option".