Raising inflation target could elevate inflation in Russian regions to double figures - Central Bank's Tremasov

ST. PETERSBURG. July 3 (Interfax) - The non-uniformity of inflation in Russia's regions is another argument for keeping the target at 4%; increasing it could elevate the consumer price index to a double-digit level in some regions, said Kirill Tremasov, adviser to the Central Bank of Russia's governor.

"What will happen to inflation if we target it at a higher level? We'll get double digit inflation in some regions, close to 20%, and forget what price stability feels like altogether. This is something that is fundamentally unacceptable given our uniformity," he told reporters on the sidelines of the Central Bank's Financial Congress in St. Petersburg.

"The need to conduct a tighter monetary policy would arise," he said.

It's a misconception that if the inflation target is raised while this indicator is high, then interest rates will fall, he said.

"Nothing of the sort. Rates would rise on the back of inflation. This would cause a very distinct lack of uniformity across regions," Tremasov said.

The Bank of Russia's insistence on achieving the inflation target has been repeatedly criticized. Opponents have repeatedly called on the Central Bank to step back from this policy for the sake of economic growth. Recently, this discussion has intensified again.