Inflation and Monetary Policy in November 2014

Abstract

In November 2014, the Consumer Price Index (CPI) amounted to 1.3% (vs. 0.6% in November 2013), which is 0.5 p.p. above its value recorded in October. In response to the mounting panic in the foreign exchange market, from 16 December the Bank of Russia raised its key interest rate to 17% per annum in an attempt to curb the ruble’s rapid depreciation. In November, the inflation rate in the Russian Federation was once again on the rise: the Consumer Price Index (CPI), as seen by the month-end results, amounted to 1.3% (vs. 0.8% in October 2014), which is 0.7 p.p. above the same index for 2013. As a result, the inflation rate in per annum terms climbed to 9.1% (Fig. 1). The core inflation rate1 in November 2014 was 1.0%, which is below its index for the same period of last year by 0.5 p.p.