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Central Bank of Russia (CBR) announced on September 15 that it decided to hike the key rate by 100 bps to 13% citing inflationary pressures remaining high, strong demand, and depreciation of ruble during summer months. (Note: In the last two MPC meetings, CBR first raised the key rate by 100 bps to 9.5% on July 21 and 350 bps to 12% on August 15). Considering that CBR is actively aiming to cool off inflation via key rate hikes, we think this can suppress demand, imports and squeeze lending in the upcoming quarters, but impacts will be seen with time lags. The Bank may consider increasing key rate at its upcoming meetings to additionally tighten monetary conditions to limit the upward deviation of inflation from the target, but this will depend on the course of inflation in Q4.