OREANDA-NEWS. October 5, 2011. Rosstat reported today (4 Oct) that Russian CPI declined to 7.2% YoY in Sep 2011 from 8.2% YoY in August on slower growth in food prices. Sluggish economic growth and lower commodity prices also aided the decline in inflation. As a result, YoY inflation reached its lowest level since Sep 2010. The September number was in line with the Bloomberg consensus estimate. In MoM terms, prices were unchanged vs a 0.2% contraction in August. The market estimate looked for a 0.1% MoM decline.

We note, however, that core inflation continued to rise, adding 0.5% MoM in September, up on the 0.4% reading in August (consensus for September was 0.4%). As a result, YtD core inflation stands at 5.1%.

That said, despite higher core inflation, the lower headline inflation number suggests to us that the central bank is unlikely to hike rates anytime soon.