OREANDA-NEWS. On October 11, the CBR announced a decrease in the currency swap rate from 10% to 8%, the information department of Alfa Bank reports with reference to the CBR. Thus far, this instrument has been too expensive to be widely used. According to the experts, the rate cut is poditive, as it expands the list of instruments through which the Central Bank provides refinancing to the banking system.

Also on October 11, CBR Chairman Sergei Ignatiev announced that inflation in the first week of October had reached 0.5%, compared with an expectation of 0.6% for the full month, and with the 0.8% figure for September, which was considered very high.

The continuation of inflationary pressure confirms that the jump in September’s CPI was not just a one-off. The main instrument that the government is planning to use is a cut in import duties and an increase in export duties for agricultural goods. However, the analysts believe that, while these steps may help reduce future price growth, they are unlikely to lead to deflation on domestic agricultural markets. Also, as both the CBR and the government have to support the Russian banking system and cannot tighten monetary policy, the released figures make the full year inflation forecast of 9.5% quite
conservative.