Inflation in Russia has been approaching a historic low and is likely to be kept well below the 4% target announced by the government.
In the last week of October, inflation was at 0.2%, Rosstat, the Russian statistics agency, announced on November 1, adding that the yearly figure stayed at 2.7%.
"The consensus forecast is that inflation is supposed to speed up by the end of the year, but it is not happening," Uralsib said in a research note.
"We forecast annual inflation at 2.8% for October," said Alfa Bank. "Despite inflation being reported in the fruit and vegetable segment, it is not sufficient to raise general inflation levels to the 0.4% m/m target we initially forecasted."
The Central Bank of Russia (CBR) explained the low inflation by an excessive supply of fruit and vegetables, as well as the strong ruble, saying that, had the ruble not strengthened in early 2017, the annual inflation would be at 4% now.
However, Alfa Bank said: "At the moment we do not agree with the government’s concerns that low inflation is the result of the tight monetary policy of the CBR. Our take is that medium-term inflationary risks are considerable and that the CBR should thus not accelerate interest rate cuts."
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