On July 23, 2021, the Board of Directors of the Bank of Russia decided to raise the key rate by 100 bps, to 6.50% per annum. According to the estimates of the Bank of Russia, in the second quarter of 2021, the Russian economy reached a pandemic level. The contribution to inflation from stable factors increased due to the faster expansion of demand compared to the possibilities of increasing output. Taking into account high inflation expectations, this has significantly shifted the balance of risks for inflation towards pro-inflationary ones and may lead to a longer deviation of inflation upward from the target. The decision on the key rate is aimed at limiting this risk and returning inflation to 4%.