Tags: russian | inflation | ruble | economy

Russian Inflation Quickens to Fastest Since 2011 as Ruble Drops

Wednesday, 05 Nov 2014 08:33 AM

Russian inflation accelerated to the fastest since July 2011, driven by the ruble’s plunge to a record and rising food prices after President Vladimir Putin banned a range of imports.

The inflation rate rose to 8.3 percent from a year earlier in October from 8 percent in September, the Federal Statistics Service in Moscow said in an e-mailed statement. The median estimate of 23 economists surveyed by Bloomberg was 8.4 percent. Price rose 0.8 percent in a month.

The ruble is the world’s worst-performing currency during the past three months, stoking the prices of imported goods. The central bank unexpectedly raised its key rate to 9.5 percent last week, tightening policy for the fourth time this year. Prices were also driven by Putin’s ban on some food imports from the U.S. and its allies in retaliation for the sanctions they enacted over Russia’s policy in Ukraine.

“We see in fact a rather tangible price growth,” Vladimir Tikhomirov, chief economist at BCS Financial Group in Moscow, said before the release. “The two root causes are the food embargo and the ruble exchange rate.”

The ruble lost more than 18 percent against the dollar in the past three months, the most among more than 170 currencies tracked by Bloomberg. It weakened 1.2 percent to 44.2106 per dollar as of 3:36 p.m. in Moscow.

Putin in August restricted imports of fish, meat, dairy, fruits and vegetables from the U.S., the European Union, Norway, Canada and Australia for a year. Food prices last month jumped 11.5 percent from October 2013, the statistics office said.

The inflation rate will stay higher than 8 percent through the first quarter of 2015, according to the central bank. Policy makers don’t exclude further rate increases, Ksenia Yudaeva, a first deputy central bank governor, said today at a briefing in Moscow.

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Russian inflation accelerated to the fastest since July 2011, driven by the ruble's plunge to a record and rising food prices after President Vladimir Putin banned a range of imports.The inflation rate rose to 8.3 percent from a year earlier in October from 8 percent in...
russian, inflation, ruble, economy
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2014-33-05
Wednesday, 05 Nov 2014 08:33 AM
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