Excerpt from the release by the Bank of Russia:
In February and in the beginning of March 2013 the pace of inflation was estimated at 7.3 percent over a year ago, which was in line with the Bank of Russia forecast of inflation exceeding the target range in the first half of 2013. High pace of inflation is mainly explained by the food prices growth and the dynamics of certain regulated prices and tariffs. The inflation rate staying above the target range for a prolonged period of time may affect economic agents’ expectations and thus poses inflation risks, in particular taking into account the planned increases in the natural monopolies’ tariffs.
The dynamics of the key macroeconomic indicators in January 2013 pointed to a continuing slowdown in economic growth. The growth rates of investment in production capacity remained subdued and the retail sales growth decelerated. The industrial output decreased. At the same time, economic confidence indicators remain overall positive and labour market conditions together with credit expansion provide support to the domestic demand.
Considering recent domestic and external macroeconomic developments the Bank of Russia judges that the current level of money market interest rates is appropriate for achieving the balance of the main macroeconomic risks. The Bank of Russia will continue to monitor inflation risks and the risks of the economy cooling down. In making monetary policy decisions the Bank of Russia will be guided by the inflation goals and economic growth prospects.