CPI monitor: Airfare turbulence

Growth in consumer prices decelerated to 0.15% WoW over the October 10-16 period from 0.24% the previous week. The downward reversal in airfares and the ongoing decline in fuel prices occurred amid high inflation in other categories of goods and services. Inflationary risks continue to prevail in terms of both overheated demand, which will be supported by the fiscal impulse, and planned tariff hikes in 2024. The limited time frame for mandatory FX sales will also prevent the CBR from ignoring devaluation expectations. In these conditions, we expect the CBR at its October 27 meeting to raise the key rate by 100-200 bps to 14-15%. At the moment, we consider a 100 bps step as more likely.