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Russian inflation continued its increasing pattern in August as Russia’s Federal Service for State Statistics (Rosstat) announced on September 8 that the annual inflation stood at 5.15% yoy. Taking into account that CPI recorded 4.3%, 3.25%, and 2.5% in July, June, and May, respectively, the data clearly show the upward trend. We believe the reasons behind the surge has been continued Rouble weakening, increased demand for imports, elevated inflation expectations, high domestic demand and lending, strong government spending, strained labor market, and demand - cost pressures in addition to risks posed by the war and sanctions. We think end year key rate will be 14% from the current 12%.