Russian Central Bank opposes idea to manage inflation, expectations through stabilization of exchange rate by intervening

MOSCOW. Dec 3 (Interfax) - The Central Bank of Russia maintains an unwavering position against calls to affect the exchange rate dynamics, and the regulator still sees no basis to fight inflation by fine-tuning the situation on the currency market rather than by altering the key rate.

VTB First Deputy Management Board Chairman and CFO Dmitry Pyanov has proposed stabilizing the situation on the currency market rather than hiking the key rate once again, indicating the ruble's sharp weakening and rising inflation expectations against this background.

"We are all currently waiting for the Central Bank to hike the key rate, to cool our consumer sentiment and increase our savings sentiment. However, the economy could then overcool, and GDP could contract. Would it not be simpler to stabilize the exchange rate? Then less cooling of the economy would be required, and it would be easier to return inflation to the target, given how sharply prices rise when the ruble falls," Pyanov wrote in an RBC column.

"We do not share this opinion," Central Bank Deputy Governor Alexei Zabotkin told reporters on the sidelines of the Measuring the Population's Inflation Expectations at the Central Bank of Russia. 15 Years of Monitoring: Results and Development conference.