Inflation has accelerated markedly in recent months, reaching 4.1% yoy in August. Core inflation increased to a historical high of 4.8% yoy, with widespread price increases, especially in services. At the end of the year, we expect headline inflation to be close to 5.4%, but even higher value is a risk. In our view, this will force the central bank to raise interest rates faster. At the next bank board meeting on 30 September, we expect rates to be raised by 50bp. Monetary policy tightening should continue over the rest of the year, with the repo rate reaching 2% at year-end, from the current 0.75%. However, high inflation will dampen the impact of higher nominal rates, as real interest rates are likely to remain deeply negative.