March 4 (Bloomberg) -- Russian inflation accelerated in February after a plunge in the ruble drove up costs of imported goods, bolstering the central bank’s case for a surprise increase in interest rates yesterday.
Consumer price rose 6.2 percent from a year earlier after a 6.1 percent advance in January, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 18 economists in a Bloomberg survey was 6.3 percent. Prices rose 0.7 percent on the month, less than the median forecast for 0.8 percent.
Central bankers led by Chairman Elvira Nabiullina held a surprise meeting on interest rates, where they raised their main interest rate by the most since 1998 effective 11 a.m. yesterday. The move, coupled with heavier foreign-currency sales to support the ruble, were meant to stop a slide in the currency after President Vladimir Putin got approval from the upper house of parliament to send troops into Ukraine.
“The only thing playing in favor of inflation accelerating is the ruble’s depreciation, which started in the third quarter of last year,” Maksim Petronevich, deputy director of OAO Gazprombank’s Center for Economic Forecasting in Moscow, said by phone before data release.
The ruble, which has lost 9 percent against the dollar this year, is the second-worst performer among 24 emerging-market currencies tracked by Bloomberg after Argentina’s peso. The Russian currency gained 1 percent against the greenback today, strengthening to 36.134 as of 4:09 p.m. in Moscow.
Bank Rossii temporarily raised the key rate, the benchmark it introduced in September, to 7 percent from 5.5 percent, almost two weeks before its next scheduled board meeting on interest rates. Policy makers are still planning to meet as planned on March 14, according to the statement.
“We see increased volatility recently, and such volatility starts to press on inflation and even to create some risks for financial stability,” Ksenia Yudaeva, central bank first deputy chairman, said yesterday in comments on state-run television Rossiya 24.
The central bank also decided to set the amount of foreign- currency sales needed to shift the ruble corridor on a daily basis. That will help “prevent risks to financial stability by limiting ruble exchange rate fluctuations,” the regulator said in a second statement yesterday.
The central bank is targeting an inflation rate of 5 percent this year after missing its range of 5 percent to 6 percent last year. The ruble’s decline in January and early February may add 0.5 percentage points to inflation, Nabiullina told reporters in Moscow on Feb. 14.
Russians see inflation as the second-biggest challenge facing the country, behind issues in housing and utilities, according to a poll published by the state-run VTsIOM research center Feb. 18.