Refinancing rate to rise to 8.25% in 2010
MOSCOW. Sept 10 (Interfax) - The Central Bank of Russia will have to raise the refinancing rate to 8.25% before the end of the year, Alfa Bank analysts Natalya Orlova and Dmitry Dolgin said in a report
"Although the refinancing rate remained unchanged at 7.75% in August, accelerating inflation will compel the Central Bank to raise it to 8.25% before the end of the year," the report says.
The report raises the bank's inflation forecast for 2010 to 8.6% from 7.5%.
"Significant growth in the consumer price index in the first week of September forced us to make an upward revision to the 2010 inflation forecast for Russia. Accelerating inflation coupled with the Finance Ministry's growing appetite for domestic debt, tighter regulation of foreign borrowing and the expected narrowing of the current account surplus will contribute to rising market interest rates, which in turn will lead to a higher refinancing rate," it says.
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