Weakening of ruble continued to carry over into prices amid sustained strong demand - CBR

MOSCOW. Oct 16 (Interfax) - The carryover effect of the ruble's depreciation into prices that occurred before continued to take place because consumer demand remained strong, the Central Bank of Russia (CBR) said in comments on inflation.

"This was reflected in the increase of prices for foreign tourism, as well as goods that depend on the exchange rate: cars, oil products, electronics and fruit," the CBR said.

The ruble's exchange rate against the three main traded currencies changed less in September than in the previous months, the CBR said. The rubles average monthly exchange rate fell 1.4% against the U.S. dollar and 0.8% against the Chinese yuan, but rose 0.7% against the euro.

Consumer prices rose 0.87% in September after increasing by 0.28% in August. Seasonally adjusted, monthly inflation accelerated to 1.14% from 0.75% in August. Consumer prices rose by a seasonally adjusted average of 0.96% in the past three months, which is equivalent to 12.1% in annual terms.

"This is higher than the rate of price growth seen at the end of 2021 and beginning of 2022," the CBR said.

Annual inflation accelerated to 6.0% in September from 5.15% at the end of August, the Federal Statistics Service reported.

The CBR expects annual inflation to continue to accelerate in the next few months. "The Bank of Russia's tightening of monetary policy will curb excess expansion of domestic demand and limit its pro-inflationary consequences," the CBR said.

Inflation in 2023 is running near the upper boundary of the September forecast of 6.0-7.0%. With the monetary policy being pursued by the CBR, annual inflation is expected to return to 4% in 2024 and stay around this figure thereafter.