Impact of strengthened ruble on inflation not yet fully felt, will last several months - CBR dept

MOSCOW. May 21 (Interfax) - The full impact of the strengthening ruble has not yet fully manifested itself in price trends, and will last for several months more, head of the Central Bank of Russia's research and forecasting department Alexander Morozov said.

"We can see the strengthened ruble reflected in prices to a significant degree, but not yet fully. We will still see this effect in May and June, at least two months," Morozov said at the Alfa Summit organized by Alfa-Bank.

He said that the effect was strongest at the moment that the ruble gains, after which it continues to be felt over a period of time.

"Our models assume that the appreciation that we had causes the so-called pass-through effect, in which inflation slows down approximately 0.5 percentage points for every 10% that the ruble appreciates in the currency basket," Morozov said.

He also said that a stronger or weaker ruble in itself was not a deciding factor in monetary policy. "This is treated as a deciding factor in the context of price trends. If we are talking about a strong or strengthening ruble which leads price growth to slow down, then the Bank of Russia will definitely take this into account as a factor influencing their rate decision," the head of the CBR department said.

Morozov said that it was important to assess whether the ruble had strengthened as part of a sustainable process.

"If there are no more disinflationary impulses, current price growth will increase from where it is now," he said.

Morozov said that he was not referring to annual inflation, which is slowing down, but about the current increase in prices.

"We are talking about current figures, especially weekly price growth, and that we should not place too much importance on them, as there is a significant pass-through effect," he said.