Russia’s inflation rate held steady in August after slowing for two straight months, weakening the case for the central bank to lower interest rates for the first time since 2011.
Consumer prices increased 6.5 percent from a year earlier, unchanged from an eight-month low reached in July, the Federal Statistics Service in Moscow said in an e-mailed statement today. That was above the median estimate of 6.4 percent in a Bloomberg survey of 22 economists. Prices rose 0.1 percent in the month after a 0.8 percent increase in July.
Inflation has exceeded the top end of the central bank’s target range of 5 percent to 6 percent for 12 months, thwarting the central bank from easing monetary policy to counter the worst economic slump since 2009. Policy makers are waiting for a slowdown in inflation to begin a “gradual” reduction in borrowing costs, Bank Rossii Chairman Elvira Nabiullina said in an interview with state-run Itar-Tass published yesterday.
“The continuing ruble devaluation” in August has contributed to inflation pressure last month, Tatiana Orlova, senior economist at Royal Bank of Scotland Group Plc in London, said before the release.
The ruble has depreciated for seven straight months against the dollar, trading 0.3 percent stronger at 33.4180 per dollar as of 3:50 p.m. in Moscow.
Bank Rossii held the refinancing rate at 8.25 percent on Aug. 9, while signaling increased concern about the economy. Russia is set to meet this year’s inflation target thanks in part to a favorable trend in food prices, Nabiullina, 49, who took over as central bank chairman in June, told Itar-Tass.
Most Russians named rising prices as their biggest concern, topping corruption and poverty, the Moscow-based Levada Center said, citing a poll of 1,601 people conducted Aug. 23-26.
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