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Russia's weekly consumer prices rise as central bank rate decision looms

Published 04/26/2023, 12:11 PM
Updated 04/26/2023, 12:26 PM
© Reuters. FILE PHOTO: A vendor (L) sells sausage at a food market, which operates once a week on Saturday, in the Russian southern city of Stavropol, March 7, 2015. REUTERS/Eduard Korniyenko

(Reuters) -Russia's weekly consumer prices rose at a faster pace in the week to April 24, data from state statistics service Rosstat showed on Wednesday, cementing expectations that the central bank will keep interest rates on hold on Friday.

The Bank of Russia is expected to hold its key interest rate at 7.5% on Friday, a Reuters poll showed this week, with the risk of inflationary pressure picking up limiting the bank's room for manoeuvre on any monetary easing.

Consumer prices rose 0.10% in the week to April 24, Rosstat said, compared with a 0.04% rise the previous week. Since the start of the year, prices have risen 1.99%, Rosstat said, a slower pace than in the same period of 2022.

In a separate set of data published on Wednesday, Russia's economy ministry said inflation was running at 2.55% on an annual basis, down from 2.82% a week ago.

Russia began experiencing double-digit inflation soon after it sent tens of thousands of troops into Ukraine on Feb. 24, 2022, eliciting sweeping Western sanctions in response.

Russian households regularly cite inflation as their main concern, with many having no savings after a decade of economic crises and rising prices dragging down living standards.

Central Bank Governor Elvira Nabiullina last week said inflationary risks, such as a weaker rouble, labour shortages and a large budget deficit, must decrease in order to create room for interest rate cuts.

Dmitry Polevoy, head of investment at Locko-Invest said the balance of inflation risks was not critical, with some improving and others worsening.

© Reuters. FILE PHOTO: A vendor (L) sells sausage at a food market, which operates once a week on Saturday, in the Russian southern city of Stavropol, March 7, 2015. REUTERS/Eduard Korniyenko

"We see no reason for a change in the rate and a tightening of rhetoric," he said.

Russia's annual inflation rate in 2022 was 11.9%, almost three times the official 4% target. The central bank forecasts inflation will be 5%-7% this year, before falling to 4% in 2024.

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