Modest rates of price growth in past weeks not sustained, risks remain - Nabiullina

MOSCOW. June 10 (Interfax) - Low growth rates of consumer prices in recent weeks can not be considered sustained, and the situation may change, Central Bank of Russia (CBR) Governor Elvira Nabiullina said at a press conference following the regulator's key rate meeting.

"However, we are not too optimistic about this fact. Indeed, prices in a small group of products (making approximately 10% of the consumer basket) did not simply rise more slowly in May, but even declined. These were mostly food products generally characterised by elevated price volatility (certain fruits and vegetables, eggs, and sugar). Prices for durable goods edged down as well, although they had been growing at a double digit pace until just recently. Speaking of the absolute majority of products, prices are still considerably above 4% in annualised terms, despite their slower rise," she said.

In February-March, households stocked up with goods and non-perishable foods for several months ahead. People are using them gradually, due to which are probably buying less currently. Furthermore, businesses notably raised prices, fearing a weakening of the ruble, among other things. Today, when the situation has stabilised, not all people are ready to purchase goods at such prices. Hence, prices are adjusting downwards.

"Nonetheless, the situation might reverse. Stocks will run out, and people will consume by making new purchases," Nabiullina said.