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SUPPLY APRIL 2019 3 Abstract Money supply growth is what eventually drives inflation. In this note, we examine how changes in foreign exchange reserves and

variables. The macro- economic indicators are GDP growth (GDP) and consumer price inflation (CPI). The policy variables are the central bank’s net foreign assets

communications “Floating rate and Inflation targeting is Instruments are Inflation below 4% Inflation 4.3% represented as a developed, the inflation targeting midterm goal in

0 - - 1 - - - - Change: - Inflation expectations become better (more than 1 standard deviation) - Inflation expectations become better (less than 1 standard deviation) - Inflation expectations unchanged (±0,

Elvira Nabiullina, the 4% inflation target was first achieved in 2017 and last year monetary policy was aimed at keeping inflation near the target. In

corresponding month of previous year temporary inflation acceleration. According to the Bank of Russia’s estimates, as annual inflation slows down in the second quarter,

could be in part driven Investment activity by the expected surge in inflation in early 2019 on the back of the VAT rate hike. All

inflation will return to 4% in the first half of 2020. In its key rate decision-making, the Bank of Russia will take into account inflation

7.50 – Reuters survey (7.75) (7.75) (7.75) 3. Implied inflation rate (OFZ-IN) March 2019 4,89 – OFZ-IN-52001 (till 16 August 2023) (4,

annual inflation in February Difference 2018 2019 Contribution to Contribution to Contribution to Price growth Price growth Price growth inflation inflation inflation Total inflation 1.