Russian inflation accelerates to 12.5%, highest since 2015

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A customer hands over Russian rouble banknotes and coins to a vendor at a market in Omsk, Russia, February 18, 2022. REUTERS/Alexey Malgavko

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March 16 (Reuters) - Annual inflation in Russia accelerated to 12.54% as of March 11, its highest since late 2015 and up from 10.42% a week earlier, the economy ministry said on Wednesday, with weakening rouble sending prices soaring amid unprecedented Western sanctions.

Inflation accelerated sharply as the currency fell to an all-time low and amid signs of increased demand for a wide range of goods, from food staples to cars, on expectations that their prices will rise further.

Weekly inflation slowed slightly to 2.09% in the week to March 11 from 2.22% a week earlier, which was the sharpest one-week increase in prices since the 1998 crisis, data from statistics service Rosstat showed.

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Prices of nearly everything from baby food to pharmaceuticals rose sharply last week, with sugar and tomato prices rising by more than 12%, Rosstat data showed.

The central bank, which targets annual inflation at 4%, raised its key rate to 20% in late February.

"Tight monetary conditions facilitate inflation slowdown but, in our view, they won't save it from soaring above 20% this year," Raiffeisen Bank analysts said.

The central bank will next meet on rates on Friday and is expected to keep the cost of lending unchanged. read more

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Reporting by Reuters Editing by Tomasz Janowski

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