UPDATE 3: Cbank says annual inflation rise to 4.4% in Jun econ shock

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MOSCOW, Jul 6 (PRIME) -- Acceleration of Russia’s annual inflation to 4.4% in June from 4.1% in May was a shock, Igor Dmitriyev, director of the monetary policy department at the central bank, said on Thursday at a meeting of the Association of Regional Banks.

“There was a big shock in June – 4.4% (annual inflation), 4.1–4.2%, these were bold estimates, some said it would be 4%,” Dmitriyev said. “This annual inflation level is quite a bad surprise. It is more than we expected month on month. We are preparing a forecast right now, by July on how it influences the trajectory of attaining 4% (the central bank’s target), return to 4% at the end of the year, and we will see then what adjustments we need.”

The Federal State Statistics Service said earlier that inflation accelerated to 0.6% on the month in June from 0.4% in May, and reached 2.3% since the start of the year.

Dmitriyev also said that the influence of the ruble exchange rate and a good harvest on inflation is close to an end.

He said that the inflation acceleration can fade in July: “By the way, it’s time for a potato harvest start – this is one of the key drivers. We can remain on the same level, can even win back one tenth towards 4.3%. I am not sure about July so far but the June’s shock is great, it is a negative surprise, 4.4%.”

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