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18 Nov, 2023 12:22

Russian central bank chief issues inflation warning

Price growth has been accelerating for half a year, and has passed 7%, Elvira Nabiullina says
Russian central bank chief issues inflation warning

Annual inflation in Russia has topped 7%, the head of the central bank, Elvira Nabiullina, has said, stressing that the figure requires more cautiousness from the government.

“Inflation has been rising consistently since June, now exceeding 7%, and in accordance with our target of 4%, this increase cannot be called harmless,” she told the State Duma on Thursday.

Her remarks followed criticism over the regulator’s recent decision to hike its interest rate to 15%.

According to central bank chair, annual inflation does not reflect the current situation with prices.

“We often give an analogy that inflation in annual terms is like a rear-view mirror, as we see the descents and ascents that we have passed, but the mirror tells you little about what is ahead,” Nabiullina said.

“So, in the annual indicator, inflation at the end of last year and the beginning of this year is now very low,” she added.

The official also said the regulator assesses “current inflation, and the way prices rise month after month” when making decisions on monetary policy.

In the three month through October, the average monthly price increase totalled 0.88%, corresponding to 11.1% in annual terms, according to central bank data.

Earlier this month, the Ministry of Economic Development reported that annual inflation in Russia in the week through November 13 had accelerated to 7.16%.

In October, the Bank of Russia raised its inflation forecast for 2023 to 7-7.5%. Previously, it expected that by the end of the year prices would increase by 6-7%.

At the same time, the regulator downgraded its inflation forecast for next year, saying consumer price growth would amount to 4.5% and return to the target of 4% as early as 2025.

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