By Andrey Ostroukh

MOSCOW, (Reuters) – Russia’s central banks will raise their key interest rates up to 100 basis point at the December rate-setting meeting. This was Governor Elvira Nubullina announced on Tuesday. President Vladimir Putin had called for preventive measures.

In an effort to curb inflation, which has reached a 5-year record high of above 8% over 4.25% this year, the country’s key interest rate was raised six times.

Putin stated Tuesday at an investment forum held in Moscow that “it is a serious issue, very sensitive for citizens”, especially families with low incomes.

It is crucial to not only overcome inflation, but also to take proactive steps to remove factors that cause prices to rise.

Moscow attempted to curb high food inflation by raising interest rates and imposing tax on exports of grain. However, the inflation rate was 8.5% as of Nov. 22 compared to the central bank’s target of 4% and its year-end forecast at 7.4-7.9%.

Nabiullina from the Central Bank stated that at its Dec. 17 meeting, Nabiullina could raise the key rate by as much as 100 basis points from 7.5%.

But it must be noted that the current inflation forecast is within the upper bound of our forecast. Nabiullina said that this would be taken into account.

Independent from the Kremlin, the central bank has stated that it plans to maintain its key rate at 6% through mid-2023 in order to reduce inflation.

Nabiullina stated that the most likely scenario is for rates to remain unchanged at December’s meeting. She stated earlier Tuesday that it was premature for her to discuss lowering the target inflation of 4% in future.