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Financials

Russia registers weekly deflation in week to Aug. 2

MOSCOW, Aug 4 (Reuters) - Russia has registered weekly deflation for the second time this year, data for the week to Aug. 2 showed on Wednesday, pointing to a possible decline in the inflationary pressure that prompted its central bank to sharply raise rates last month.

Russia’s consumer price index declined 0.06% in the week to Aug. 2, mostly driven by a fall in the price of vegetables, the federal statistics service Rosstat said.

Inflation data is closely monitored by the market and the central bank, which last month raised its key interest rate by 100 basis points to 6.5%, its sharpest increase since 2014, in an effort to curb rising consumer prices.

Inflation is a sensitive issue in Russia ahead of September parliamentary elections as it eats into incomes already dented by the COVID-19 crisis and the weak rouble.

Annual consumer inflation, the central bank’s main area of responsibility, exceeded the 4% target in November and climbed to 6.5% in June, its highest since August 2016.

Analysts polled by Reuters had on average expected annual inflation to accelerate to 6.6% in July. Rosstat will publish monthly inflation data on Thursday.

So far this year, the consumer price index rose 4.53%, Rosstat said on Wednesday. The central bank expects inflation to end this year at 5.7-6.2%, before returning to 4.0-4.5% in 2022. (Reporting by Andrey Ostroukh; Editing by Alexander Smith)

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