Russia's inflation exceeding forecast, CBR could revise figure in July along with rate trajectory - Yudaeva

ST. PETERSBURG. July 1 (Interfax) - The Central Bank of Russia (CBR) could possibly raise its inflation forecast for 2024 and the average key rate in July.

"Considering the fact that our actual [inflation] is higher than the forecast, it [the forecast] will be revised accordingly. I think this is possible for inflation and for the key rate. Judging by the actual data, it [inflation] is higher than the forecast," Ksenia Yudaeva, advisor to the Russian Central Bank governor, told journalists at the Summer Macroeconomic School.

"Let us wait for the new forecast in order to discuss this," Yudaeva said in response to when annual inflation could peak in Russia.

Yudaeva said that it would be possible to assess, by the next meeting of the CBR board of directors on the key rate on July 26, whether the alternative scenario with the regulator hiking the key rate has being implemented. The upcoming meeting is a so-called pivotal one, namely that the press release will be accompanied by publication of the medium-term forecast. The CBR will post the summary of the discussion on the key rate and commentary on the forecast on August 7.

"We have the upcoming meeting, during which we will review all the information that has appeared by that time, and we will discuss whether we have entered it [the alternative scenario]," she said.

"Between meetings, when we (a) have not yet received all the information, and (b) have not yet analyzed it, it is complicated for me to issue these statements," Yudaeva said.

She emphasized that there is still enough time to analyze the incoming information.

The CBR in April forecast inflation of 4.3%-4.8% for 2024. The CBR expects inflation to return to the target of 4% per annum in 2025 and remain close to this figure going forward.

The CBR in April projected an average key rate of 15%-16% for 2024, 10%-12% for 2025, and 6%-7% for 2026, with the latter range previously assessed as neutral.

The CBR previously said that it could hike the key rate significantly in July if it is convinced that the alternative scenario will materialize. Central Bank Governor Elvira Nabiullina earlier said that a hike in the key rate exceeding 1 percentage point is substantial.