**Russia's Persistent Inflation Battle: Central Bank Stands Pat on Rates**

The Russian central bank surprised markets last week by maintaining its key interest rate at 21%, even as fresh economic data underscores the stubborn nature of the Russian inflation rate challenge. According to weekly statistics released by the Federal State Statistics Service, the consumer price index posted a 0.33% increase for the week ending December 23, bringing the year-to-date inflation rate to 9.5%.

**The Rate Hold Strategy**

Despite mounting price pressures, monetary policymakers concluded that holding rates steady was the appropriate move. Officials believe current tightening measures have established the right conditions to eventually guide the Russian inflation rate toward their 4% target. Andrei Gangan, leading the central bank's monetary policy division, provided his own assessment of where prices are headed: the annual inflation rate is expected to settle within a 9.6% to 9.8% range.

**What This Means for Markets**

The central bank's decision reveals confidence that their previous policy shifts are beginning to take effect, even though the Russian inflation rate remains substantially above target. With year-over-year inflation sitting at 9.5%, the gap between current levels and the policy goal demonstrates the scale of the challenge ahead. The hold on interest rates suggests policymakers believe the tightening cycle has sufficient momentum without further rate increases at this juncture.