Nabiullina: the weakening of the ruble will be reflected in prices

The weakening of the ruble will be transferred to prices, the Bank of Russia is monitoring the situation, said the chairman of the regulator Elvira Nabiullina on the sidelines of the St. Petersburg International Economic Forum (SPIEF).

“The weakening of the exchange rate that has occurred, of course, will be transferred to prices, but the timing and scale of this transfer may differ from what we are used to due to the fact that the restructuring of the economy is underway, relative prices are changing, etc.”, – she said (quote according to TASS).

The Central Bank will monitor the situation and take this into account when making further decisions on the key rate, Nabiullina added.

Since the beginning of June, the ruble has weakened sharply against the dollar, euro and yuan. As the investment strategist told Vedomosti, “BCS the world of investment” Alexander Bakhtin, this is due to the aggravation of geopolitics and the consequences of the April price decline in oil. Analyst “Digit Broker” Daniil Bolotskikh predicted the weakening of the ruble until mid-June.

Bank of Russia earlier pointed out, commenting on the ruble depreciation in April, that due to significant stockpiles, the impact of the exchange rate on the cost of equipment and electronics in the country is not yet very noticeable. But as these inventories are renewed and consumer demand grows, the weakening of the ruble “will be reflected in the prices of more goods.”

The Board of Directors of the Central Bank at a meeting on June 9 for the sixth time in a row left the key rate at 7.5% per annum. It has been at this value since September 2022. But the regulator’s hawkish signal, as Vedomosti wrote, has become tougher: the Central Bank “allows” the rate increase at the next meetings. According to the regulator’s forecast, in the second quarter inflation will be at the level of 3.6%, and by the end of the year it may reach 4.5-6.5%. In 2024, inflation will reach a plateau.