Nabiullina stated that prices are rising due to the fuel crisis.

      The Bank of Russia published a statement from Chairwoman Elvira Nabiullina, in which she commented on the current economic situation. One of the key topics was the rise in inflation.

      "In June, the price increase accelerated. This was mainly related to the situation in the fuel market, as well as the resumption of price growth for fruits and vegetables, which atypically fell sharply in price during the spring," the statement said.

      Nabiullina noted that the rising fuel prices are beginning to spread to the prices of a wide range of goods and services. This predictably reflected on inflation expectations, which significantly increased in July.

      "Gasoline is an important marker commodity, as it accounts for a significant share of regular purchases by the population and in the costs of companies," explained the head of the Central Bank.

      As the situation in the fuel market stabilizes, inflation expectations may decline, she added. The Bank of Russia has not changed its assessment of sustainable inflation and believes that in the second half of the year it will remain close to current levels.

      Regarding the prospects for monetary policy, Nabiullina stated that considering the new inputs regarding the budget and the likely secondary effects from the recent price increase, a higher trajectory for the key rate is required. Its range for the current year has been raised to 14.5–14.6%, and for the next year to 10.5–12.5%.

      Earlier, we reported that the annual inflation in the Kirov region accelerated to 6.88% — this is higher than the national average (6.02%).

      Also today, the Bank of Russia decided to lower the key rate to 14%.