Central Bank of Russia prepared to maintain tight policy and hike rate until inflation fall to 4% - Nabiullina

MOSCOW. Sept 13 (Interfax) - The Central Bank of Russia plans to maintain a tight monetary policy as long as it takes to bring inflation down to 4% and is not prepared to accept an inflation rate of 6%-8%, Central Bank Governor Elvira Nabiullina said during a press conference.

"We believe it is necessary to return inflation to 4% next year, and to do this we are prepared to keep monetary conditions tight for as long as necessary. We are also prepared to continue increasing the key rate," she said.

"Why is it so important to return to 4%, rather than accept 6%-8%? Firstly, to protect the savings and incomes of citizens, and secondly, only when inflation is low will long-term loans be available. When inflation is high, such loans, including mortgages, will be costly for most borrowers, since that cost includes an inflationary component. Thirdly, when inflation is significantly higher than in trading partner countries, the ruble weakens constantly," she said.

Nabiullina said high inflation meant high price volatility. "If we accept price growth of 6-8%, then the risks of inflation moving into double figures will increase significantly, and bringing it back under control will be much harder and costly for society, so the Bank of Russia will do all it can to lower inflation to 4% next year," she said.