Russia’s central bank will increase benchmark interest rates as inflation nears the upper limit of its target range, according to Citigroup Inc.
“As inflation is crawling up to the upper bound of the Russian central bank’s target range of 5-6 percent, the regulator may hike rates,” analysts led by David Lubin said in an e-mailed report today. Bank Rossii will increase deposit and repo auction rates at its “next meetings,” the analysts said.
“Weak” data in July will not rule out rate increases, the analysts said. While Russian retail sales grew at the slowest pace in 18 months in July, that “is not likely to worry” the central bank, according to the report.