“Putin Confronts Financial ‘Waterloo’ Risk to Choke Off Inflation”
“Central bank gets greenlighted to keep monetary policy tight”
“Heavy spending linked to war effort has put pressure on prices”
“As Russia’s central bank prepared to lift interest rates last week, an executive at a top state lender warned policymakers were confronting no less than their “Waterloo” — a battle with inflation whose outcome would prove momentous for the country’s financial institutions and markets.
The eventual hike was double the forecast of most economists, a decision that left Russia with one of the world’s highest rates when adjusted for inflation. It marked the culmination of a shift in official thinking over the risks of a price spiral, according to people familiar with the matter, as looming presidential elections stretch spending commitments already swollen by Russia’s war in Ukraine.”
More pain for RuZZians.
“The [RuZZian] central bank expects its key rate to average 12.5%-14.5% next year.”
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“It’s also a threat for wide segments of the financial market such as unsubsidized mortgages as well as lending to consumers and companies, Belenkaya said. Floating-rate debt accounts for more than 40% of consumer credit, leaving it particularly exposed.”