Inflation may reach 4% target in H1 - MinFin's Kolychev
MOSCOW. March 21 (Interfax) - Russian inflation may reach the Central Bank's 4% target before the end of the first half of the year, Deputy Finance Minister Vladimir Kolychev said.
"It [annualized inflation] is currently about 4.3%-4.4%; more likely in March it will remain at that level, somewhere around 4.35%. Before the end of the first half it may be 4% given a favorable combination of circumstances," Kolychev told journalists.
The Economic Development Ministry said at the beginning of March that the inflation target might be met in the second half of the current year.
Kolychev said that such a level of inflation is possible if current trends continue; on the labor market salaries have slowed slightly in the private sector and if the exchange rate's contribution, which has been positive so far, continues.
The Central Bank's decision on rates at the next session, whatever it may be, will not impact inflation before the end of H1, he said.
"Lag effects from the changing of rates are longer than one quarter, so the effect on inflation from the change of the key rate which may or may not happen in March, will not really manifest itself in H1. Thus the forecast H1 can be, in principle, made not even based on some assumptions on the Central Bank decision," Kolychev said.
The next session of the Central Bank board of directors on monetary policy will take place on March 24. Igor Dmitriev, the director of the Central Bank's monetary policy department, said in an interview with Bloomberg that he sees the preconditions to propose that the board of directors look at the possibility of lowering rates. "Seasonally adjusted monthly inflation in February, according to the estimate of the Central Bank, was 0.1% against 0.3% in January. This is of course a low value and for me this is the time to propose to the board of directors in March to examine the possibility of lowering rates, among other options," he said.