Russian inflation cooling down
Last month, the regulator cut its key interest rate by 100 basis points to 20%, citing a slowdown in inflation. It marked the first rate reduction since 2022 when the central bank adopted a tight monetary policy to stabilize the economy amid a wave of restrictions.Although annual inflation remains elevated at 9%, well above the central bank's 4% target, monthly price growth has slowed to a pace consistent with that goal, according to Bank of Russia data released on Thursday. This marks the 'first meaningful sign that the central bank's battle against inflation may be turning a corner after a protracted period of ultra-tight monetary policy,' the outlet said.
To gauge current inflation trends, the central bank monitors a seasonally adjusted annual rate (SAAR) of monthly price growth. If the current trajectory holds, analysts expect inflation to return to target sometime next year. That is likely to fuel expectations of earlier and potentially deeper key rate cuts than previously anticipated, Bloomberg noted. Inflation expectations, another key factor in rate decisions, held steady at 13% in July for a second straight month, according to Bank of Russia. Deputy Governor Aleksey Zabotkin said last month that estimates aligned with low inflation should be closer to 8%, highlighting a gap the bank continues to monitor as it weighs further easing.Even so, the recent slowdown in price growth suggests the central bank could shift toward a more dovish stance – meaning it could prioritize economic growth over inflation control by cutting interest rates. Zabotkin said rate setters could consider cutting borrowing costs by more than 100 basis points at next week's meeting.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Russia Today
9 hours ago
- Russia Today
India has significant rare earth reserves
India has about 7.23 million tonnes (MT) of rare earth elements, Minister of State for Science and Technology Jitendra Singh told the lower house of the Indian parliament on Wednesday. Another 1.29 MT of rare earths are situated in hard rocks in the states of Gujarat and Rajasthan, Singh wrote in a reply to a parliamentary question, according to the Indo Asian News Service (IANS). Rare earths are used in areas such as defense, electronics, and batteries in electric vehicles. India's Atomic Minerals Directorate for Exploration and Research is exploring and augmenting rare earth minerals in coastal sands, riverine areas, and hard rock terrains, IANS added. The Geological Survey of India has identified 482.6 MT of rare earth element ore resources across 34 projects, Singh said. Although the South Asian nation possesses the world's third-largest reserves of rare earths, less than 20% has been explored so far. Earlier this month India launched a $156 million subsidy scheme to boost domestic production of rare earth magnets. The proposed scheme aims to support both private companies and public sector enterprises by providing incentives to establish domestic capacity across the entire value chain. New Delhi has stepped up its efforts to make the magnets after Beijing announced export restrictions in April. China presently dominates the global market, accounting for around 60% of the world's supply of rare earth magnets. Under China's revised rules, its exporters are required to secure licenses and submit end-use declarations that confirm that materials will not be used in the defense industry or be re-exported to the US. In light of the restrictions, the Indian Foreign Ministry is proactively working with key stakeholders to address the difficulties caused by certain countries' export restrictions on rare earth magnets, Singh added.
Russia Today
16 hours ago
- Russia Today
The US is about to drive a massive stake into the South Caucasus
A recent report from the Spanish outlet Periodista Digital made waves by claiming that Armenia may be preparing to hand over control of a strategic corridor in the Syunik province to an American private military company. If this report is true, the consequences will be profound. This would mark the entry of a Western security actor into one of the most sensitive regions in Eurasia. Armenian sovereignty would be significantly diminished. The strategic calculus of Iran, Russia, China, and Turkey would shift. And the South Caucasus, a region held in balance by conflicting pressures, would face a serious realignment. The Armenian government has denied the report. But the idea that such a scenario could emerge is not far-fetched. Over the past year, the United States has expanded its institutional presence in Armenia. It has signed a Strategic Partnership Charter, introduced border and customs reforms, and deepened security cooperation. American contractors and advisors are already on the ground. These developments suggest a deliberate effort to secure long-term influence – framed as technical assistance, but carrying clear geopolitical weight. The Syunik corridor sits at the center of this unfolding dynamic. Iran views the territory as a gateway to the Caucasus. Russia considers it a buffer protecting its regional interests. China has identified it as a possible node in the westward expansion of Belt and Road infrastructure. US involvement in this space, even indirectly, would be interpreted by each of these powers as a strategic provocation. Moscow would see this as confirmation that it is being pushed out of the South Caucasus altogether. Tehran would regard it as another stage in a pattern of encirclement. Beijing would see growing risk in placing long-term logistical bets on a region where US-aligned security actors operate. France, which has positioned itself as Armenia's diplomatic partner, would lose ground to a deeper US-Turkish arrangement. Each player would adjust accordingly, and the fragile equilibrium that has kept open conflict at bay would begin to fray. For Türkiye, this shift could unlock long-held ambitions. A Western-secured corridor through Syunik would give Ankara a direct route to Azerbaijan and Central Asia. The corridor would serve Turkish strategic and commercial goals while shielding Turkey from accusations of coercion. American involvement would provide cover – and legitimacy. The presence of a US-linked private military actor would not go unnoticed or unanswered. It would alter how other regional powers assess risk, opportunity, and urgency. The shift would not require formal agreements or large troop deployments. Influence would be exerted through contracts, technical programs, and private-sector partnerships. The effect would be real. The South Caucasus is one of the few regions where major powers still operate in parallel without direct confrontation. That balance has held not because of harmony, but because each actor respects the costs of escalation. When a new player enters that system – especially one with global reach – the calculations change. This is why the report matters. Even if the details prove inaccurate, the scenario it outlines matches current trends. It reflects a trajectory already visible in US policy: assertive engagement through nontraditional instruments, designed to shape the regional environment without provoking formal conflict. It also reflects the growing potential for backlash. Strategic moves framed as stabilization may be perceived by others as disruption. And when those others include nuclear powers and regional heavyweights, perception quickly becomes policy. The logic of great-power competition that has shaped recent years of international security policy has now reached the South Caucasus. The form is quieter – conducted through infrastructure, contracts, and influence – but the stakes remain high. In this environment, smoke should not be ignored. It may not always mean fire. But it always means heat – and someone is trying to raise the temperature.
Russia Today
a day ago
- Russia Today
Russia ousts Germany from global top-five beer brewers
Russia has overtaken Germany in beer production for the first time, pushing the EU country out of the top five global brewers, according to an industry report released on Tuesday. Russia's beer output rose by around 9% in 2024, reaching nearly 9.1 billion liters, while production in Germany declined by 1% to 8.4 billion liters. As a result, Germany fell to sixth place, the report by leading global hop trader BarthHaas said. BarthHaas CEO Thomas Raiser told DPA that Russia's advance is mainly due to a sharp drop in beer imports, which has boosted domestic production. The shift follows the escalation of the Ukraine conflict more than three years ago and the trade and economic sanctions that ensued. Since early 2022, major Western brewers such as Carlsberg, Heineken, and AB InBev have exited the Russian market. While the EU did not formally ban beer exports to the country, sanctions and corporate withdrawals disrupted supply chains and logistics. In response, Moscow introduced steep import tariffs on alcoholic beverages from 'unfriendly' countries, making foreign beer significantly less competitive. Two Russian breweries have also entered BarthHaas' Top 40 Brewers list. Baltika Breweries, ranked 12th, was part of the Carlsberg Group until mid-2023. United Breweries (OPH), formerly owned by Heineken, joins in 24th place, the report noted. Given the surge in production, Russia has also expanded its beer exports. In the first quarter of 2025, exports rose 25% year-on-year, with key markets including Belarus, Kazakhstan, China, Abkhazia, and Tajikistan. Shipments also resumed to several African and South American countries. Germany, once a brewing powerhouse, continues to see falling consumption, driven by an aging population, increased competition from other beverages, and reduced purchasing power, according to DPA. Rising production costs have similarly taken a toll, with 52 breweries closing in 2024 alone, official statistics show. The BarthHaas report also pointed to two consecutive years of economic contraction in Germany, along with a decline in hops production. According to the document, the world's four largest beer producers in 2024 were China, the US, Brazil, and Mexico.
