Slowing economy, lower inflation will give Central Bank room to lower rate more quickly - Nabiullina

ST. PETERSBURG. July 2 (Interfax) - If indicators show a faster slowdown in the economy and deceleration of inflation in Russia, this will give the Central Bank room to cut the key rate more quickly, Central Bank Governor Elvira Nabiullina said.

"We look at both investment demand and consumer demand, and at business activity in general. Regarding investment demand, the following are key for us: for example, production of building materials, machine building, the volume of construction work, and orders for this work. In aggregate, they are still signaling that investment activity is still high. Second there are consumer demand indicators. Operational indicators are also important. These include data from cash registers, car sales, durable goods and enterprise demand assessments. And all of them together signal that consumer demand is cooling in general, but mainly due to goods sales, while demand for services remains high," Nabiullina said during the Central Bank's Financial Congress.

"Business activity indicators in general are survey indicators. We have an extensive sample, we survey about 13,000 enterprises each month. There are those who take loans from banks, and those who do not take out loans. The business climate index shows a downward trend so far, according to the latest data. We look at electricity generation, capacity utilization, the volume of payments in our payment system. All of these are key indicators. Then the financial results of companies, we analyze the credit analytics of banks, this is also important," she said.

"If these indicators signal a faster economic slowdown, then naturally, we'll see inflation fall below the target, and this will give us room to lower the key rate more quickly than for we, for instance, predicted," she said.