Free Republic

Inflationary expectations among Russian households for the year ahead stood at 13.4% in November, unchanged from October, while inflationary pressure remained high, the central bank said on Monday. The central bank raised its benchmark interest rate to 21% last month, the highest level in more than 20 years, citing high inflation and elevated inflationary expectations as the main reasons for the move. -snip- The central bank board will convene for the next rate-setting meeting on Dec. 20, with the officials saying that a further tightening of monetary policy was possible.

Russia's central bank hiked its key interest rate by 200 basis points on Friday to 21%, the highest level since the early years of President Vladimir Putin's rule, when Russia was recovering from the chaos that followed the collapse of the Soviet Union.

Russian authorities are facing some unpalatable options as they try to keep the economy afloat - unless they can persuade President Vladimir Putin to curb massive military spending. Officials fear that without limiting the defence budget, the government will have to raise taxes, increase the pension age or print money to prevent the state deficit from running out of control. Despite a crisis brought on by diving oil markets and Western sanctions, they believe Russia can muddle through next year provided the price of crude, its dominant export earner, holds near current levels. But even at $60 per barrel, the...