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Weekly consumer prices edge up in Russia as central bank rate decision nears

MOSCOW (Reuters) – Russia’s weekly consumer prices edged up for a fourth straight week, data showed on Wednesday, adding to analysts’ expectations that Russia’s central bank may decide to end its rate-cutting cycle next week.

After Russia’s emergency rate hike to 10%, the central bank lowered its benchmark rate six times this year as Russia sent tens of thousands of dollars to Russia of troops into Ukraine, causing inflation to soar. The bank cut interest rates to 7.5% last month.

Russia’s CPI rose 0.% in one week Oct17, Rosstat Federal Statistics Office said. Before the current four-week series, the last weekly price increase was in May.

A separate set of Rosstat data released Wednesday showing the producer price index, which measures how much suppliers charge customers, held at an annual rate of 3.8% in September, the same reading as in August.

In other data, the economy ministry said annual consumer inflation slowed to 13. 10% As of October 17, decline from 13.36% a week ago.

Declining living standards put pressure on consumer demand, impacting retail sales and causing summer deflation. Analysts say President Vladimir Putin’s military mobilization now threatens productivity, demand and economic recovery.

But Evgeny Suvorov, an economist at CentroCredit Bank, said the mobilization appeared to have a deflationary effect on the prices of most commodities as people cut back on spending.

“Some go to the front, some leave, some hide,” Suvorov wrote on his MMI Telegram channel. “If the de-inflation trend strengthens significantly in the next few weeks, the central bank may cut interest rates again in October 28.”

The central bank in a Wednesday statement The current lending dynamics and budget parameters of 2022-23 will accelerate the money supply, indicating that inflationary pressures in the economy in the coming quarters will be Increase.

High inflation has been a top concern for Russian households for many years, as it eroded their spending power and affected living standards. Russia has a relatively high poverty rate, with surveys showing that more than half of households have no savings.

Consumer prices have risen 10.55 percent since the beginning of the year, Rosstat said. At the same point in time 2022, the year-to-date inflation rate was 6.23%.

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