Russia's inflation could exceed Central Bank's forecast of 8.5% in 2024, another rate hike not ruled out -Tremasov

PERM. Nov 28 (Interfax) - The Central Bank of Russia does not rule out that inflation could exceed the forecast of 8.5% by the end of the year, and the regulator allows for the possibility of another rate hike in December, Kirill Tremasov, advisor to the Central Bank governor, said at the Perm Engineering and Industrial Forum on Thursday.

"The Central Bank's official inflation forecast is 8%-8.5% for the year. According to the data that we have accumulated since the October meeting, it is clear that inflation is moving closer to the upper boundary of the range. It cannot be ruled out that inflation would be higher than our official forecast," Tremasov said, noting that the regulator does not expect a sharp deviation.

This is a serious blow to the inflation expectations of the population, and the situation is "absolutely unacceptable," Tremasov said.

"The Central Bank in this situation intends to do everything possible to restore price stability as quickly as possible and return inflation to the target," he said.

Tremasov recalled that the Central Bank had forecast inflation to be within 4.5%-5% by the end of next year, and targets 4% in 2026.

He also said that pro-inflationary pressure is rising in the conditions of constant sanctions pressure and exchange rate volatility.

"A long period of tight monetary policy is required to restore price stability," Tremasov added.

"There is virtually no doubt that the Central Bank's board of directors will consider the matter of further hiking the key rate at the December meeting, though the decision is not set in stone," he said.

The board meeting is scheduled for December 20.