MOSCOW: Inflation expectations among Russians increased in July, the central bank said on Wednesday, potentially complicating the bank’s goal of reining in prices growth. Russian households, polled for the central bank’s study, cited a hike in utility tariffs and expectations of poor harvest as pro-inflation risks. “To keep inflation close to the target reading and to further decrease inflation expectations, the Bank of Russia retains moderately tight monetary policy,” the central bank said.
The central bank kept its key rate unchanged at 9 percent last week, pledging to continue monetary easing cycle in the coming months as inflation has already neared its ultimate 4 percent target. Polled households said on average they viewed the current annual inflation level much higher, at 10.7 percent. In a monthly report on inflation expectations and consumer sentiment, the central bank noted that consumer sentiment worsened in July, linking this to a late harvest of fruit and vegetables. But consumer activity, the key economic driver, has somewhat improved as more Russian households said it was time for big purchases rather than for saving, the central bank’s study showed.