OREANDA-NEWS. January 22, 2010. CPI has risen 1.2% YTD (1-18 January 1-18), according to Rosstat, reported the press-centre of OTKRITIE Financial Corporation.

View: Even though inflation is seasonally high in January, the 1.2% figure for the first 18 days of January 2010 is above expectations. It is equal to the figure posted for the same period last year, when inflation rose on the back of rapid growth in housing and utilities tariffs and the effects of ruble devaluation.

Since as of yet there is no evidence of improving demand, we consider this level of inflation as a negative development. As CBR expected inflation to halve YoY, high inflation could limit its willingness to cut rates, which we believe is still necessary.