Monthly price growth slowed sharply in June, signaling the central bank’s fight to tame increases is gaining traction, the outlet has reported
Monthly inflation in Russia slowed sharply in June, the strongest sign to date that the central bank’s extended cycle of tight monetary policy is beginning to curb price pressures, Bloomberg reported on Thursday.
In response to Western sanctions imposed on Russia since the escalation of the Ukraine conflict three years ago, the Bank of Russia raised its key rate several times, from 9.5% to a high of 21% to stabilize the ruble and contain inflation.
Last month, the regulator cut its key interest rate by 100 basis points to 20%, citing a slowdown in inflation. It marked the first rate reduction since 2022 when the central bank adopted a tight monetary policy to stabilize the economy amid a wave of restrictions.
Although annual inflation remains elevated at 9%, well above the central bank’s 4% target, monthly price growth has slowed to a pace consistent with that goal, according to Bank of Russia data released on Thursday. This marks the “first meaningful sign that the central bank’s battle against inflation may be turning a corner after a protracted period of ultra-tight monetary policy,” the outlet said.
Read more Russian companies losing interest in foreign currency – central bankTo gauge current inflation trends, the central bank monitors a seasonally adjusted annual rate (SAAR) of monthly price growth. If the current trajectory holds, analysts expect inflation to return to target sometime next year. That is likely to fuel expectations of earlier and potentially deeper key rate cuts than previously anticipated, Bloomberg noted.
Inflation expectations, another key factor in rate decisions, held steady at 13% in July for a second straight month, according to Bank of Russia. Deputy Governor Aleksey Zabotkin said last month that estimates aligned with low inflation should be closer to 8%, highlighting a gap the bank continues to monitor as it weighs further easing.
Even so, the recent slowdown in price growth suggests the central bank could shift toward a more dovish stance – meaning it could prioritize economic growth over inflation control by cutting interest rates. Zabotkin said rate setters could consider cutting borrowing costs by more than 100 basis points at next week’s meeting.
Hence then, the article about russian inflation cooling down bloomberg was published today ( ) and is available on Russia Today ( News ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Russian inflation cooling down – Bloomberg )
Also on site :
- ‘The Princess Bride’ Star Cary Elwes Shares Tribute to Rob Reiner: ‘From That Very First Meeting I Fell In Love With Him’
- A Shockingly Recent Year Just Cracked the Top 5 of Rock's Most Legendary Years
- SFM Announcement: Kessler Topaz Meltzer & Check, LLP Encourages Sprouts Farmers Market, Inc. (SFM) Investors to Contact the Firm About Securities Fraud Class Action Lawsuit