Bank Of Russia Leaves All Rates Unchanged

The Bank of Russia said Friday it is leaving interest rates unchanged despite increased signs of the same inflationary pressure that caused it to raise rates in September.

The central bank said that consumer prices had risen 6.6% in September from a year earlier, “which exceeds the upper limit of the target range for inflation” of 6%. While this was largely due to rising food prices and regulated tariffs, the bank saw indications that inflation was spreading to “other segments of the consumer market,” despite there being no significant increase in demand.

The bank also noted that the main macroeconomic indicators in August pointed to “some cooling of economic activity,” with slower growth in industrial production, investment rates and consumer demand. At the same time, however, the unemployment rate remained low and showed no signs of deteriorating in August or September.

Following its last meeting in early September, the Bank of Russia raised all interest rates 25 basis points, citing an increase in food prices and regulated tariffs. It said at the time that year-on-year inflation had hit 6.3% on Sept. 10– just above its annual target of 6%. The Russian Economics Ministry has forecast inflation of 7% this year.

Still, the central bank saw signs of stabilizing growth in credit markets and saw the risk of a significant slowdown in economic growth as low.

The bank said it would continue monitoring global economic conditions and inflation risks and would focus on mid-term inflation targets.

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