Report experts: New devaluation in Russia inevitable

Baku. 10 October. REPORT.AZ/ In late October, annual inflation in Russia is expected to drop below 3%.

Report informs citing the TASS, Russian Economic Development Minister Maxim Oreshkin said at the conference of the World Trade Organization (WTO) at ministerial level. "In principle, the inflation trend is soft. According to our forecasts, inflation will be below 3% per annum at the end of October. It is 1% lower than our target and is not considered as good", Oreshkin said.

According to him, the Russian Bank (Central Bank of Russia) has already reacted to the situation and reduced its discount rate in September. The deflation observed in Russia for two consecutive months. In August, prices fell by 0.5% and in September 0.1%.

Analytical Group of Report News Agency informs, although Russia needs to increase the money supply to prevent deflation, the Russian Bank does not want to take such a step: “Because the increase in the money supply will ultimately increase the demand for foreign currency when the economic conditions deteriorate and lead to a decrease in foreign currency reserves. Therefore, devaluation is the only instrument in the hands of the government to increase inflation. In the short-term prospect, the rise in US-dollar rate in Russia is inevitable".