Page 47 - RusRPTJan23

Despite the increase in inflation, the Central Bank of Russia (CBR) Is not expected hike rates from the current 7.5% at its next monetary policy meeting on December 16. CBR governor Elvia Nabiullina has said that the increase in prices are being driven by sanctions and related increases in the price of things like power that the central bank has no control over. Moreover, with the economy expected to contract this year by 2-3% and for there to be a recession in the first quarter of next year, the economic slowdown is disinflationary and so more rate hikes are unnecessary.
“While we expect some acceleration in December m/m price growth, this inflationary spike would be mostly non-monetary. The breakdown of November’s figure also implies that inflation is not a result of monetary shock – non-food and food inflation still reflects a weakness in household consumption. Thus, we expect the CBR to keep the key rate at its current level of 7.5% at the policy meeting on December 16,” BCS GM said.
47 RUSSIA Country Report January 2023 www.intellinews.com