(Bloomberg) -- Russian inflation is showing initial signs of losing steam, according to the latest weekly data, as the Bank of Russia mulls the need for more interest-rate hikes on Feb. 11.
Consumer prices rose 0.19% in the week through Jan. 28, down from 0.22% in the period through Jan. 21, the Federal Statistics Service reported late Wednesday. Prices for many food items continued to rise, including fruits and vegetables and sunflower oil, while poultry and eggs decreased in price, the agency said.
Annual inflation reached 8.82% as of Jan. 28, the Economy Ministry said Wednesday, up from 8.64% reported for Jan. 21.
“Inflation pressure remains elevated,” the Bank of Russia's research department said in a report. “Prices so far aren't showing the formation of a steady downward trend.”
Inflation is more than twice the central bank's 4% target despite 425 basis points of rate increases over the last year. Fears of new U.S. and European sanctions amid the crisis around Ukraine have helped push the ruble down about 2% this year, potentially adding to inflation pressures.
What Bloomberg Economics Says...
“January inflation looks like the peak, but it's a long way down. The central bank is set for another big rate hike next week to help contain the risk of an extended spike.”
--Scott Johnson. For his latest research, click here.
The central bank has said further tightening could be needed to bring inflation back down. Forward-rate agreements show more than 100 basis points of hikes in the next three months.
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