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This content was produced in Russia where the law restricts the scope of Russian military operations in Ukraine
MOSCOW, Oct 26 (Reuters) – Russian weekly consumer prices rose slightly for the fifth week running, data published on Wednesday showed, two days before the central bank is expected to end its rate-cutting cycle and keep the key rate on hold its at 7.5%.
The central bank has cut its key rate six times this year after an emergency hike to 20% in February when Russia’s decision to send thousands of troops to Ukraine sent inflation soaring. Last month, the bank cut rates to 7.5%.
Russia’s consumer price index rose 0.08% in the week to October 24, the Rosstat federal statistics service said. Price increases accelerated from a marginal 0.02% increase in the previous week.
The central bank is targeting inflation at 4% and is closely watching the data, especially in the run-up to board meetings. Households’ inflationary expectations rose again in October to 12.8%, data showed on Tuesday.
“We believe that the publication of the survey results should not significantly shift the mood of the central bank in a more hawkish direction,” Raiffeisen Bank analysts said. “The regulator is likely to keep the key rate at 7.5%.”
Most analysts polled by Reuters on Monday expected a hold, as slowing inflation becomes less marked and geopolitical uncertainty dampens consumer demand.
Falling living standards dampened consumer demand, hitting retail sales and leading to an extended period of summer deflation. President Vladimir Putin’s military mobilization drive threatens to undermine productivity, demand and economic recovery, analysts said.
High inflation has for years been a concern for Russian households as it reduces their spending power and eats into living standards. Poverty rates are relatively high in Russia and surveys show that more than half of all households have no savings.
Since the beginning of the year, consumer prices have increased by 10.64%, Rosstat said. At the same point in 2021, year-to-date inflation is running at 6.49%. (Reporting by Alexander Marrow and Darya Korsunskaya; Editing by Barbara Lewis)