Russian govt, Central Bank should improve joint actions to reduce inflation - Putin

NOVO-OGARYOVO. Aug 26 (Interfax) - President Vladimir Putin has called on the Russian government and the Central Bank of Russia to improve joint actions to reduce inflation.

"I particularly once again draw the attention of both the government and the Central Bank of Russia. It is necessary to improve the effectiveness to coordinate actions to reduce inflation," Putin said at a meeting on economic matters.

"It is obvious that inflation must be combated systemically, first and foremost, by increasing the supply of goods and services. This is clear, so that their volume meets domestic demand, both consumer demand, from citizens, and investment demand, from enterprises and companies that are implementing development projects, investing in the modernization and expansion of their capacity, in construction, in the purchase of equipment," Putin said.

"In terms of monetary policy, as is known, the Bank of Russia alters the key rate and regulates the bank lending market in order to curb inflation, and the dynamics here are outstripping. Oddly enough, we are seeing these dynamics despite the rise in the key rate. Consequently, the amount of loans to businesses increased over 20% year-on-year, and debt on consumer loans not secured by mortgages increased by 3.5 trillion rubles according to the results of June," Putin said, commenting on the growth rate in lending amid the hike in the key rate.

"According to the specialists, this situation to a significant extent incentivizes consumer demand and contributes to growth in inflation," Putin said.

"It is very important that the rapid development of the financial sector does not lead to negative consequences, a delicate matter," Putin emphasized.