Putin Presses for Rate Cut as Russia Inflation Slows to 5.31%
Updated
Updated · The Bell · Jun 19
Putin Presses for Rate Cut as Russia Inflation Slows to 5.31%
3 articles · Updated · The Bell · Jun 19
Summary
Next Friday’s Bank of Russia rate decision has become a test of central-bank independence after Vladimir Putin publicly argued that slowing inflation justified lower borrowing costs.
5.31% annual inflation in May and 0.17% monthly inflation were weaker than forecasts, but Deputy Governor Alexei Zabotkin said those figures still do not signal imminent easing.
0.20% inflation in the week to June 8, rising gasoline prices, record-low unemployment and core inflation running at 4%–5% all point to persistent price pressure in an overheated economy.
High state spending, entrenched inflation expectations and fading support from the stronger ruble further narrow room for cuts, while any prolonged Strait of Hormuz blockade could add imported inflation.
Elvira Nabiullina’s illness-driven absence from public events has added uncertainty over whether she will lead the press conference and how forcefully she will defend the bank’s stance.