If the Official Inflation Charge Is Right, the Actual Coverage Charge In Russia Is Now 12.4%

The Central Financial institution of Russia at the moment raised the coverage charge from 19% to 21%.

That’s assuming (1) adaptive expectations, and (2) the inflation charge is precisely measured. (h/t Anders Aslund) One would possibly suspect that y/y inflation by way of September was truly greater than the reported 8.6%, however who is aware of. (The Central Financial institution has an October estimate of anticipated inflation of 13.4%, through TradingEconomics – I’ll take their phrase for it, as I can’t learn Russian so I don’t know the traits of this estimate.)

Curiously, whereas Russian GDP is anticipated to hit 3.5% development this 12 months, BOFIT’s forecast is for 1% in 2025 and 2026 (IMF October WEO signifies 3.6% for 2024, 1.3% for 2025). These forecasts predate the rise in coverage charges at the moment (though presumably they have been to some extent anticipated).