Only 18 out of 200 countries in the world have a central bank rate higher than 17%

Mikhail Ershov gave a comment to the Stolypin Club's telegram channel regarding the increase in the key rate by the Central Bank of Russia.

Only 18 out of 200 countries in the world have a central bank rate above 17%. And in terms of the real rate (i. e. adjusted for inflation), we are among the top three of them. That is, we have real rigidity in monetary approaches.

An increase in the key rate obviously leads to an increase in the cost of companies. As a result, they are forced to raise their prices. And when there are no external sources of financing and all producers are tied to the Russian banking system, this is most acute.

When we fight against price increases by raising the interest rate, a vicious circle turns out. High rates have a bad effect on both large and small and medium-sized businesses. Such a high rate simply closes a business that does not have collateral for lending. Under these conditions, economic growth will depend even more on government support. And business should have opportunities for its own development.

For reference: the Central Bank's rate is above 17% for Venezuela, Turkey, Congo, Argentina, Sudan, Egypt, etc. But at the same time, most of these countries have higher inflation than the rate, while ours is the opposite.