Consumer prices fell in August, the first drop since Russia began market reforms in 1992 after the collapse of Communism.
Prices fell 0.2 percent last month, the State Statistics Committee said Wednesday. The drop was led by a 1.7 percent decline in food prices.
Inflation has been falling steadily since February and the annual rate for 1996 is expected to be about 25 percent. Last year annual inflation reached 130 percent.
Prices are expected to start rising again this fall, but officials predict inflation will stay around 1 percent a month for the rest of the year.
President Boris Yeltsin’s government has made reducing inflation a top priority.