OREANDA-NEWS. September 04, 2009. Preliminary Rosstat estimates of CPI for the week ended 31 August show deflation of -0.1%, which lowered the figure for August to +0.1% (compared with 0.4% for August 2008). YoY inflation reached +11.7%, after reaching 12% in July, reported the press-centre of OTKRITIE FC.

View: We regard this information on inflation as positive because it provides greater flexibility for a further softening in budget and monetary policy. September should bring a continuation of policy rate cuts from CBR, though the Central Bank is very cautious. Consequently, we expect that only minor rate cuts, that is, not more than 0.25 percentage points. We also hope that the Government will be less concerned about inflation and will intensify its implementation of the existing budget.