Monday, December 25, 2023

Russian Central Bank Acting as If It Believes Inflation is Far Higher than Kremlin Claims

Paul Goble

            Staunton, Dec. 22 – In a sign that the Russian Central Bank believes that inflation is far higher than the Kremlin says it is and may even be as high as some independent experts say, the Bank is continuing to raise key rates to try to prevent price increases from going out of control in the future, Aleksey Martov says.

            The pseudonymous Russian journalist says that if inflation in Russia were what the Kremlin says it is, there would be no basis for the Bank’s actions; but if it is as high as some independent surveys indicate it is, then what the Central Bank is doing makes good sense (россияне-и-война-у-политики-кремля-слишком-высокая-цена).

            The Kremlin and Russian government media insist that inflation has in fact fallen and is now around seven percent, but a Romir survey indicates that real inflation since the start of Putin’s war in Ukraine has been seven times that figure (

            The former figure would not justify what the Central Bank is doing, but the latter one would certainly compel this institution to raise interest rates in the hopes of cooling off the economy and preventing the Russian economy from entering into a period of hyperinflation with all the political consequences that would have.

            That the Kremlin wants to declare victory in the fight against inflation is no surprise, but that the Central Bank which it at least nominally controls has not equally willing to do so not only suggests that officials are aware that inflation in Russia is far higher than is being reported  but that the dangers of the country slipping into hyperinflation because of the war are very real.


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