Russia's central bank is stimulating economy as ruble depreciation and job losses add to inflationary pressures "Slow lending, sluggish foreign trade and labor market conditions have emerged. -Inflation risk drivers."

A Russian ruby ​​banknote is pictured in front of the Kremlin in central Moscow on April 28, 2022. Photo by ALEXANDER NEMENOV/AFP via Getty Images

Russia's central bank has warned against inflation amid a declining ruble and worker shortages. The 4,444 manufacturers on Friday left rates unchanged but signaled future rate hikes.

"The decision to raise prices was considered, but under the agreement it was decided to keep the level but to make the mark stronger." alarm bell.

Policy makers have kept interest rates at 7.5% since September but signaled a hike is imminent.

Gov. Elvira Nabiullina told a news conference that "the decision to raise prices was considered, but because of the agreement we decided to keep the rate but strengthen the mark," adding that "price risks. Increased ’

But the central bank talked about an increase of 25-75 points, he said. That was similar to Wednesday's data, which showed consumer prices rose sharply on a weekly basis.

The hike was the first since the central bank hiked rates to 20% shortly after Russia invaded Ukraine last year, as it sought to stabilize rubies and money markets after the West refused to freeze the Kremlin's currency reserves.

Afterwards, as inflation fell, the central bank lowered interest rates. But its latest forecast sees inflation rising from 3.5% to 4.5%-6.5% by the end of the year.

"The pace of spending, falling foreign trade and labor market conditions remain drivers of higher inflation," the central bank said on Friday, noting that inflation was high.

The warnings come as Russia has shifted to a more militarized economy and Ukraine has begun spending more on defending the Kremlin.

Currently, the ruble is down 14% against the dollar this time around 2023, which will drive up commodity prices and fuel inflation. On Friday, the ruble topped 83 against the dollar, hitting its lowest level in two months.

Russia is suffering from job losses as Vladimir Putin's war in Ukraine hits workers, data show. More than 300,000 troops were deployed last year and hundreds of thousands more are expected this year, with nearly 200,000 of them killed or wounded in Ukraine

Unemployment is exacerbated by mass emigration from Russia to other countries to avoid military service or economic hardship. A recent study estimated that 1.3 million young workers left their jobs last year alone, pointing to a “significant brain drain”.

Unemployment also contributed to the drop in industrial activity in Russia last month, down 5% from the previous month.