Inflation in the third quarter was higher than the Central Bank predicted – Kommersant
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Chairman of the Bank of Russia Elvira Nabiullina at a press conference following a meeting of the board of directors said that one of the reasons why the regulator decided to raise the key rate to 15% per annum was that actual inflation in the third quarter exceeded the Central Bank’s forecasts. Among other factors that influenced the Central Bank’s decision to raise the key rate, Ms. Nabiullina named an increase in fiscal stimulus and the projected change in oil prices.
Deputy Chairman of the Central Bank Alexei Zabotkin clarified that, in addition to inflation, the growth rate of lending in the third quarter also turned out to be higher than the regulator’s estimates. “The third quarter demonstrated more rapid dynamics, which is associated with the dynamics of demand. And yes, in order to return the economy to a trajectory of sustainable balanced growth, and inflation to the target of 4% within the same time frame, more stringent conditions for conducting monetary policy are required,” said Mr. Zabotkin (quoted from a video broadcast in YouTube).
Today, October 27, the Board of Directors of the Bank of Russia announced an increase in the key rate by 200 basis points – from 13% to 15%. This is, among other things, explained by increased inflationary pressure, which turned out to be higher than the expectations of the Central Bank. In the third quarter (July-August), annual price growth was 12.1% after 5.1% in the second. Annual inflation, estimated as of October 23, increased to 6.6% after 6% in September.
More details in the material “Race with inflation”.
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