MOSCOW, January 30Inflation statistics in Russia in January are encouraging, Central Bank Governor Elvira Nabiullina said in an interview.
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“We see that in December the current rate of price growth was lower than in November, and in January the statistics are also encouraging,” she said.
According to Nabiullina, this was influenced by the increase in the key rate .
«Our monetary policy is aimed at curbing inflation and returning it to our goal of four percent. To achieve this, we raised the key rate,» the head of the Central Bank clarified.
At the same time, she added that the regulator continues to be concerned about price expectations. As Nabiullina noted, for enterprises they remain at a high level, while for citizens they have decreased slightly, but are still higher than in November.
The head of the Central Bank emphasized that the regulator will make decisions on further actions based on the analysis of all data.
“If you look at our base forecast, we see room for a rate cut this year, most likely in the second half of the year. Exactly when this will happen will depend on incoming data. We must make sure that the trend towards lower inflation is sustainable,” she clarified Nabiullina.
Since July, the regulator began to raise the key rate to combat accelerating inflation — at first by only one percentage point, but a month later, in August, the Central Bank, against the background of the fall in the ruble exchange rate, sharply increased the rate at an extraordinary meeting — by 3.5 percentage points. In the fall, the regulator added a total of three percentage points, and in December — another percentage point, bringing the figure to 16%.
The key rate is the minimum percentage at which the Central Bank issues loans to commercial banks and accepts money from them for deposits. Its size affects inflation. When the regulator raises the key rate, money in the economy becomes more expensive — bank rates on loans and deposits for households and businesses increase. It becomes more profitable to open deposits and save than to spend and take out loans. Therefore, the demand for goods and services decreases, prices begin to rise more slowly, and inflation slows down.
According to Rosstat, in December, annual inflation slowed for the first time since April and amounted to 7.42% at the end of the year.
Read the full text of the interview at the link to Ria.ru>>>