Russia: Inflation moderates in November
December 6, 2011
In November, consumer prices rose 0.4% over the previous month, on the back of monthly increases in all the main price categories. The monthly figure was slightly down from October's 0.5% increase and was below the 0.8% rise recorded in November last year. As a consequence, annual headline inflation dropped from October's 7.2% to 6.8%, which is the lowest reading since August 2010. The core consumer price index, which excludes short-term price changes influenced by administrative and seasonal factors, rose 0.5% in November, mirroring the result recorded in October. Despite the monthly increase, however, annual core inflation dropped from October's 7.2% to 6.9% in November. Meanwhile, on 25 November, the Central Bank decided to leave the refinancing rate unchanged for a sixth consecutive month at 8.25%, in a move that was widely expected by market analysts. In addition, the Central Bank maintained the overnight repurchase rate at 5.25% and the overnight deposit rate at 3.75%, thus leaving the overnight rate corridor unchanged. The Bank had narrowed the overnight rate corridor by 50 basis points in September, in order to reduce interest rate volatility. The government is aiming for inflation to end the year between 7.0% and 7.5%.
Author: Armando Ciccarelli, Head of Data Solutions