World Economy

Russia CB Plans Lower Key Rate

Russia CB Plans Lower Key RateRussia CB Plans Lower Key Rate

Russia’s consumer price inflation came in at 0.1% level in the week between July 11 and 17. The key figure of the weekly report is 1.7% week/week decline in food and vegetable prices, which affirms the trend of the previous week and signals the start of the long-awaited seasonal deflation, noted Nordea Bank, Yahoo reported. With a surprisingly cold spring and summer in the European part of Russia, new harvest is coming to market later than usual that has already pushed inflation higher in June. The headline figure rose to 4.4% year-on-year from 4.1% year-on-year in May, the rise primarily explained by unfavorable fruit and vegetable price dynamics. There are signs of seasonal deflation gathering momentum, the short-term inflation outlook gets a shade brighter, stated Nordea Bank. The key rate is currently at 9%, and the two options on the table are to lower the rate by 25 basis point or to leave it unchanged. Economic activity data released recently shows a continuing rebound of the Russian economy in the second quarter of 2017.


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