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Monetary Policy and Inflation in June 2020

Alexandra V. Bozhechkova – Head of Monetary Policy Department of the Gaidar Institute; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute; Director of Center for Central Banks Studies of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Despite large scale external shocks seen in February-March 2020, there was no spike in inflation in Russia and at the period-end of June, the annual inflation rate came to merely 3.2%. After a short-term price surge, which was observed in March-April 2020, downward pressure on prices was exerted by a weak consumer demand, ruble’s appreciation, as well as decline in inflationary expectations of the population and businesses. In these circumstances the Bank of Russia cut its key rate to 4.5%, i.e. to all-time minimum.

Key words: inflation, basic inflation, annual inflation, prices, consumer prices, monetary policy, key interest, rate, target, Bank of Russia.