Moving Central Bank rate speeding up Russian inflation to 8.73%

Inflation in Russia accelerated to 8.73% in January, the highest level since the beginning of 2016, and data from the statistics service Ross tat showed on Wednesday, reinforcing expectations that the central bank will choose to picks up another big rate hike at its meeting on Friday.

Rising consumer inflation has become a sore point for Russia, shaking living standards and prompting President Vladimir Putin to call for containment measures. The central bank has raised its key interest rate seven times in 2021 but that still hasn’t stopped inflation, which is targeting 4%, from surging higher. The Central Bank of Russia is now expected to raise interest rates again on Friday as inflation could be fueled by the recent sharp decline in the ruble, which usually affects prices by making goods Imports are more expensive. Analysts polled on average by Reuters had expected the central bank to post a strong 100 basis point increase to 9.5% at its February 11 meeting, the second-biggest gain consecutive.

The consumer price index rose in January slightly above analysts’ expectations in a world renowned news website poll for an 8.8% gain. The central bank, which has repeatedly said the annual pace of consumer price growth will slow from its 2022 target, will release a new set of forecasts on Friday. Monthly inflation rose 0.99% in January, Ross tat said. In the week before February 4, the consumer price index increased by 0.29%.