Not a complete surprise if you knew just two facts. The first one was the information embedded in foreign exchange. From a July 1 post: "The ruble was approaching 90 to the dollar last I saw, an indication that there are deep changes going on in the Russian economy."
The second one was: Russia's central bank governor, Elvira Nabiullina is very, very good at the central banking gig.
First up, from Reuters via Yahoo Finance, July 21:
Russian central bank surprises with sharper-than-expected rate hike to 8.5%
And the follow-up from Reuters:
Russian central bank governor speaks after hiking rate to 8.5%
Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin gave a news conference on Friday after the bank hiked its key interest rate to a higher-than-expected 8.5%.
The Bank of Russia officials spoke in Russian. The quotes below were translated into English by Reuters.NABIULLINA ON RUSSIAN EXPORTS
The global economic growth rate is slowing down, and this is reflected in the prices of Russian export goods. Gas, coal and fertilisers are becoming cheaper on the global market. Russian exports are thus under double pressure - both from sanctions and the economic cycle.NABIULLINA ON INFLATION RISKS
Pro-inflationary risks have significantly intensified over the forecast horizon. These include a possible increase in the gap between growth in demand and supply capacity, the continued higher growth rates of consumer lending and a further aggravation of staff shortages.
Other pro-inflationary risks include a sharper transfer of rouble depreciation into prices, and persistently high inflation expectations. A deterioration in external conditions, including a possible tightening of sanctions, remains a significant risk....
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