OREANDA-NEWS. On 11 August 2009 was announced, that Consumer Price Index (CPI) decreased by 0.1%, m/m in July. The main contributors to the inflation suspension were the decrease in the food prices (-0.2%, m/m) and utilities prices (-3.3%, m/m), though alcoholic beverage and tobacco prices grew 4.4%, m/m, transportation services rose in price by 1.1%, m/m. Cumulative CPI accounted for 8.5% in 7M09. At the same time Producer Price Index (PPI) increased by 0.7%, m/m in July, contributing to 4.9% cumulative PPI in 7M09.

Millennium Capital regards the reduction in CPI to be related mainly to money supply decrease in June and as expected in July, related to high US dollar demand, which decreased the demand on the commodity markets. The seasonal decrease in the food prices also contributed to the CPI slow down. Millennium Capital expects that CPI will be quite slow in the next months, related to a significant decrease in the money supply (UAH 39.7bn in 7M09) and expected hryvnia devaluation. Until the government issues its local bonds for more than UAH 25bn in 2009, we expect the inflation to be 14.3%, y/y in 2009.

Millennium Capital is an integrated financial services provider. Established in 2000 by a group of professionals with solid background in securities and corporate finance, Millennium Capital is now one of the major investment banking institutions.