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Factories are running three shifts making everything from vehicles to clothing for the military, while a labor shortage is driving up wages and fat enlistment bonuses are putting more rubles in people’s bank accounts to spend. All that is driving up prices. High rates can dampen inflation but also make it more expensive for businesses to get the credit they need to operate and invest.
He acknowledged there had been criticism of the central bank, saying that “some experts believe that the Central Bank could have been more effective and could have started using certain instruments earlier.”