CPI monitor: Ascent driven by cucumbers and airfares

Inflation accelerated to 0.21% WoW over the January 24-30 period vs. 0.14% the previous week on the back of rising prices for vegetables and another spike of growth in airfares. That said, restrained consumption, which has decelerated to levels seen last autumn, remains the key fundamental factor. This ensures the maintenance of stable inflation components at a safe level for the CBR. In addition, inflation expectations decelerated in January for a third straight month, despite ruble depreciation at year end. This combination of factors is creating preconditions for maintenance of the key rate at its current level (7.5%) at the CBR’s meeting on February 10.