Russia's April Inflation Rate at 17.8%... "Highest in 20 Years"

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] Last month, Russia's consumer price inflation rate reached 17.83% year-on-year, marking the highest level since January 2002.

On the 13th (local time), major foreign media outlets reported, citing the Russian Federal State Statistics Service, that the inflation rate for the previous month was 17.83% compared to the same period last year.

Following a 16.7% inflation rate in March, Russia continued to experience high inflation in April. However, the month-on-month inflation rate was 1.56%, showing a slight slowdown compared to March's 7.61% increase from February. The Russian Central Bank forecasted that inflation could reach between 18% and 23% this year.

Russia has faced unprecedented Western sanctions due to its invasion of Ukraine, which disrupted supply chains and destabilized the Russian currency, the ruble. The ruble's value plummeted after the invasion, hitting an all-time low in March, while demand for various products from food to automobiles increased, accelerating the price rise trend.

In response, Russian authorities implemented measures immediately after the war broke out in February to defend the ruble's value and curb inflation. These included raising the benchmark interest rate, capital controls, restrictions on foreign currency remittances, mandatory conversion of 80% of foreign currency earnings by export companies into rubles, and mandatory ruble payments for natural gas exports.

These defensive measures have led to a rebound in the ruble's value. The ruble exchange rate, which soared to 120 rubles per dollar at the beginning of last month, has now fallen to around 65 rubles, close to pre-war levels.

The Russian Central Bank cut the benchmark interest rate by 3 percentage points earlier last month and further reduced it by another 3 percentage points on the 29th. After the economic turmoil caused by Western sanctions on February 28, the benchmark rate, which had been sharply raised from 9.5% to 20%, has now been lowered back to 14% annually.

This content was produced with the assistance of AI translation services.