CBR keeping 2012 inflation forecast at 6%
NOVO OGARYEVO. July 20. (Interfax) - The Central Bank of Russia (CBR) is keeping its inflation forecast for 2012 at 6%, the bank's Chairman Sergei Ignatyev said at a Russian Presidential Economic Council meeting.
"Inflation, God willing, will be around 6% this year. We are really hoping for that. We want it and will achieve it," he said.
When asked by several experts and Russian President Vladimir Putin whether the refinancing rate is high or not, and why it is above the inflation rate, Ignatyev said "there's nothing wrong in this".
He added that the CBR mainly provides funds through REPO operations. "We are now providing funds through REPO operations for a period of one day to seven days at an average rate of 5.35%," Ignatyev said, adding that this is below the inflation forecast for this year.
Therefore, the main interest instrument for providing financing holds a real negative interest rate.
Ignatyev also said that there has been a slight deficit in liquidity, partially because of ongoing capital outflow. "Therefore, banks' interest rates on loans for the real sector in the recent months, starting from the middle of last year, have tended to increase in general. But I hope that they will decrease if inflation declines," he said.