Inflation Risks Have Led to a Sizable Increase in the Key Rate[Реализовавшиеся Инфляционные Риски Привели К Значительному Повышению Ключевой Ставки]

On September 15, the Bank of Russia raised the key rate by 100 bps to 13.0% per annum, which was the third consecutive meeting that ended with a tightening of monetary policy. Since July 21, the rate had been raised by 550 bps. In addition, a rather tight signal was given on the further trajectory of monetary policy and the published forecast on the rate allows its increase by another 100 bps in October. In August, annual inflation (over the last 12 months) accelerated to 5.2% with the consumer price level rising by 0.28% in August, which seasonally adjusted amounts to 10.0% in annualized terms. In July-August, the price growth for non-food products and foodstuffs with the exception of fruit and vegetables accelerated, which was, among other things, a result of the ruble exchange rate pass-through that fell by almost 30% since the beginning of the year. According to our estimates, annual inflation will continue to accelerate and will amount to 6.5–7% year-on-year by the end of the year. A steady slowdown in annual inflation will commence only from mid-2024 and by the end of 2024 it will drop to 5–6%.