Price Deflation and the Russian Grain Harvest

Deflation is a developing worldwide story.

Many news stories about deflation have recently focused on Europe, Japan and Australia.

Now, it's Russia. The governor of the country's central bank has been discussing the prospects of price deflation relating to Russian agriculture.

Here's an excerpt from a July 1 Marketwatch article:

Russia may see weeks when consumer prices decline in August and early this fall on the back of a sound grain harvest, the central bank's governor said [June 30].

Speaking at a press briefing, Elvira Nabiullina said that weekly deflation was possible.

Disinflation should give the central bank room for more rate cuts later this year, which should limit contraction in Russia's oil-dependent economy, analysts say. The key rate, now at 10.5%, is far above the level of 5%-6%, where the central bank sees annual inflation by the end of this year.

You can read the entire article by following the link below:

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