Posted on 10/01/2021 11:37:39 AM PDT by MNJohnnie
MOSCOW—Russia will need to raise interest rates further to combat stubbornly high inflation that overshot forecasts and shows little signs of slowing, a Reuters poll showed on Thursday.
Russia’s export-focused economy has already recovered to pre-pandemic levels and is on track to grow further. But the recovery, together with global inflation and a weak rouble, is pushing consumer prices higher, denting living standards.
The consensus forecast of 22 analysts polled in late September suggested the central bank will raise its key rate for the sixth time this year at the Oct. 22 board meeting to 7 percent.
Some analysts said the central bank could raise the rate to 7.25 percent, addressing inflation that accelerated to 7.3 percent as of late September, flying at levels last seen more than five years ago and above the 4 percent target.
“It appears, that Russia is now dealing with the consequences of the additional social payments the government disbursed ahead of the Parliamentary elections held on 17-19 September,” ING said.
President Vladimir Putin ordered a one-off payment to pensioners and the military ahead of the election, boosting inflationary expectations.
The consensus forecast for 2021 year-end inflation moved to 6.5 percent from 6.0 percent seen in late August.
Higher rates are designed to tame inflation, a sensitive issue in Russia, and should also support the rouble by making investments into high-yielding rouble assets more attractive.
Analysts expected the rouble to trade at 72.70 to the dollar and 86.00 to the euro 12 months from now, compared with forecasts of 74.00 and 89.00 respectively in the previous poll.
“We remain bullish on the rouble due to improved fundamentals,” Oxford Economics research firm said.
“However, given the evidence of intensifying net private capital outflows, we think USD/RUB, which is currently at around 73, will only gain around 3 percent vs the USD in the remainder of 2021.”
Despite higher rates, the economy was still on track to grow 4.3 percent this year, its fastest in a decade, the poll indicated, confirming the projection from a month earlier.
Most of the forecasts in the Reuters poll were based on at least 10 individual projections.
Sounds like Biden is running things in Russia also.
At least, Russia is taking action of combat its inflation problem. We’re doing nothing about ours.
Biden will have to wait for direction from his handlers like Obama.
Just remove everything that is going up from your calculations and you cure inflation. /s
Basically, petro products.
So if we all get Russian bank account so we can make some interest on our saving is Joey going to monitor them too?
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