Moscow: Russia's central bank won't consider further rate cuts until February as the inflation rate is set to climb this month from the lowest in more than two years, according to National Bank Trust.
"Inflation is likely to speed up this year, which will limit the central bank's capacity to cut interest rates," the Moscow-based bank said in a report yesterday.
"We expect January to bring a surge in inflation caused by the traditional New Year indexation of tariffs, and in particular those of utilities and communal services and the cost of public transport."
Consistent fall
Consumer-price growth last month slowed to 8.8 per cent, the lowest year-end level on record, from 9.1 per cent in November. The inflation rate has fallen every month since August, allowing the central bank to cut its benchmark borrowing cost ten times since April. Bank Rossii lowered the refinancing rate by a quarter-point to a record low 8.75 per cent effective from December 28.
The bank has cut the rate from 13 per cent in April after the world's biggest energy exporter lurched into its deepest economic decline since the collapse of the Soviet Union, contracting 10.9 per cent in the second quarter and 8.9 per cent in the third.
