Russian inflation hits 5-yr peak ahead of cenbank meeting

    MOSCOW, Sept 8 (Reuters) - Russia's annual inflation
accelerated further in August towards levels last seen in 2016,
data showed on Wednesday ahead of the central bank's board
meeting where it is widely expected to raise rates for the fifth
time this year.
    Inflation is a sensitive issue in Russia as it overshot the
central bank's 4% target in late 2020 and shows no signs of
slowing, eating into incomes already dented by the COVID-19
crisis and the weak rouble ahead of a September parliamentary
    Russia's consumer price index (CPI) rose 6.68% in
year-on-year terms in August, its sharpest increase since August
2016, after a 6.46% rise a month earlier, data from the federal
statistics service Rosstat showed.
    Analysts polled by Reuters expected annual inflation to be
at 6.6%, reflecting the weak rouble that filters into prices by
making imports more expensive.
    To combat rising prices, the Russian central bank is set to
increase the key interest rate by 50 basis points to 7% on
Friday after a 100-basis-point hike in July, which would bring
it above inflation for the first time so far this year, a
Reuters poll suggested.
    Rate hikes affect inflation with a lag of a few quarters and
are designed to tame rising prices by making borrowing more
expensive and by increasing the appeal of keeping money at
banks' deposits.    
    The central bank expects inflation to end this year at
5.7-6.2%, before returning to 4.0-4.5% in 2022.
    Month on month, the CPI rose 0.17% in August, above the
market consensus forecast for a 0.1% increase. In the week to
Sept. 6, the CPI rose by another 0.07%, Rosstat said.
    Rosstat gave the following details: 
     RUSSIAN CPI              Aug 21    July 21   Aug 20
     Mth/mth pct change       +0.17     +0.31     -0.04 
     - food                   -0.51     -0.50     -0.77 
     - non-food               +0.80     +0.77     +0.41 
     - services               +0.32     +0.88     +0.37
     Y/Y pct change           +6.68     +6.46     +3.58
     Core CPI y/y pct change  +7.07     +6.78     +3.11
 (Reporting by Andrey Ostroukh; Editing by Emelia