Inflation possibly accelerating owing to one-off factors does not cancel focus on lowering key rate - Central Bank of Russia Governor Nabiullina

MOSCOW. Oct 30 (Interfax) - Inflation possibly accelerating owing to one-off factors, such as increases in VAT and utility tariffs, does not cancel the focus on lowering the key rate, Central Bank of Russia Governor Elvira Nabiullina said in the State Duma.

"We forecast inflation to decline next year toward the target level of 4%. It may accelerate briefly at the beginning of the year owing to tax increases, then owing to the accelerated growth in utility tariffs, though this does not cancel the focus on lowering the key rate," Nabiullina said.

"It is very important that the overall budget configuration for next year generally contributes to reducing inflation. I emphasize that, in our view, increasing VAT is considerably less inflationary than financing the deficit by increasing public debt. We at the Central Bank of course support the government and the State Duma's commitment to a balanced budget," she said.