Russia’s central bank doesn’t rule out raising interest rates or keeping them unchanged at its Oct. 5 meeting as inflation risks intensify, First Deputy Chairman Alexei Ulyukayev said.
“We think that inflation risks are higher” than the threat of an economic slowdown, Ulyukayev told reporters in Moscow today. The ruble will probably remain at about 35 against the central bank’s target basket of dollars and and euros in the near future, Ulyukayev said.
Russia is splitting from policy makers in other major economies focused on bolstering economic growth, with President Vladimir Putin pledging to remain on a “steady and consistent path aimed at subduing inflation.” Bank Rossii unexpectedly raised all policy rates by a quarter-point last month after price growth exceeded the upper limit of its target.
“We do not expect the Russian central bank to immediately react to inflation challenges,” Julia Tsepliaeva, head of research at BNP Paribas in Moscow, said by e-mail. Tsepliaeva predicts the regulator will keep borrowing costs unchanged this month before raising them a quarter-point in November.
The ruble slid from the highest level in almost a week against the dollar, dropping 0.3 percent to 31.13 per dollar as of 11:59 a.m. in Moscow. The Russian currency lost 0.3 percent against the euro to 40.1504 and was down 0.3 percent versus the central bank’s euro-dollar basket.