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down of inflation processes in the economy: • Firms’ inflation expectations adaptability. As companies rely on past fast price growth, it leads to higher inflation expectations

is anchoring inflation at the 4% target and bringing down inflation volatility. Stable inflation is vital for a sustainable reduction in household inflation expectations and

monetary policy and forecast a further reduction in inflation under 3% at end-2017. In the medium term, inflation is expected to return to the 4

bonds and shares markets demonstrated better stability. Persistently low inflation fostered a further decrease in inflation expectations. Market participants also expect a key rate cut

is the real interest rate, g is GDP growth and p is inflation. The rule says that when GDP (income) growth surpasses real interest rates

conduct operations with foreign currency. rate of a respective currency, interest rates, inflation rate, derivatives’ prices, official statistical information, physical, Individual Indicators Highlights biological and

in the stabilisation of the quality of bank lending portfolios. Moreover, with inflation being close to 4%, the Bank of Russia was able to continue

trend in inflation expectations of economic agents ing the considerable increase in the cost of borrow- to bring them down to the inflation target. ing

Cambridge, MA and London: MIT Press, 1987. 4. Exchange Rate Pass-Through to Inflation. Is Russia different? // IMF Country Report, Russia. 2015. August. No. 15/212.

of inflation in these periods. This, for all the growth in inflation expectations, was not the case in 2014, subsequently helping slow down inflation (consequentially,