Russia to hike rates to 14% as inflation pressure remains high - Reuters poll
By Elena Fabrichnaya and Alexander Marrow
MOSCOW (Reuters) — Russia will hike its benchmark interest rate to 14% on Friday and give another hawkish signal to the market, a Reuters poll showed, with the central bank needing to rein in accelerating inflation exacerbated by the weakness of the rouble.
Nineteen of 21 analysts and economists polled by Reuters on Monday predicted that the Bank of Russia would raise its key rate to 14% at Friday's meeting from the current 13%. One tipped an increase to 13.75% and another forecast a sharper hike to 15%.
«Inflationary pressure and most importantly inflationary expectations in the economy remain elevated,» said Alexander Fetisov, head of Rosselkhozbank's capital markets analytics department.
Annual inflation accelerated to 6.38% as of Oct. 16, above the bank's 4% target, pushed up by Russia's budget deficit, labour shortages, strong consumer demand and the rouble's depreciation this year.
The rouble's slide forced the central bank into an emergency 350 basis-point rate hike in August, accounting for most of its 550 basis points of monetary tightening since July.
Seeking to regain some control over the rouble rate, President Vladimir Putin has ordered the mandatory sale of foreign currency revenues for 43 groups of exporters, a capital control that came into force last week. The rouble has strengthened sharply since that requirement was announced.
Those demands, and the bank's previous tightening steps, are holding the key rate back from further increases for now, said ACRA rating agency's Dmitry Kulikov.
The central bank could raise rates as high as 15%, said Mikhail Vasilyev, chief analyst at Sovcombank, forecasting a hike to 14% but expecting a hawkish signal that additional
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