In February, inflation decreased, but since the beginning of March, the balance of risks for inflation has changed

In February 2020 remained the disinflationary trends are influenced by the overall high saturation of the food market, restrained demand and the lag effects of the strengthening of the ruble in previous months. However, since the beginning of March there has been a significant change in external conditions associated with the spread of the epidemic of the coronavirus and the deterioration of the situation on the oil market, noted in the next issue of information-analytical review of the Bank of Russia “Dynamics of consumer prices”.

These events caused the weakening of the ruble is a significant, but short-term proinflationary factor. Inflation from a low level of recent months will return to the target of the Bank of Russia faster than predicted earlier.

However, pronounced and lasting slowdown of the global economy and the impact of increased uncertainty and recent tightening of monetary conditions on domestic demand dynamics may become important factors in the disinflationary in the medium term plan.

The Bank of Russia will comprehensively consider the effects of these changes on medium-term inflation dynamics, inflation expectations and economic development and to assess the risks of sustainable inflation deviation from the target at the forecast horizon.

13 Mar 2020