Ulyukayev: achieving 6%-7% 2011-inflation target will be tough
DAVOS. Jan 27 (Interfax) - Achieving Russia's 2011 inflation target of 6%-7% will be immensely difficult, but the Central Bank of Russia has not changed the forecast, First Deputy Chairman of the Central Bank of Russia Alexei Ulyukayev said.
"We have not changed the forecast, but achieving it will be exceedingly hard," Ulyukayev told the press on the sidelines of the world economic forum in Davos.
Russia has an even chance of seeing either an inflow or outflow of private capital this year, although the former is more likely, Ulyukayev said.
"There is the likelihood of a large inflow. And that seriously concerns me. A large inflow is dozens of billions, fifty, sixty, or seventy billion dollars - and that is macroeconomically significant," he said.
Capital outflow in the third and fourth quarters and 2010 overall is not a major worry, Ulyukayev said, because it reflects many varying trends.
The movement of capital is influenced by such factors as less carry-trading due to reduced exchange-rate predictability, the paying-off of foreign debts and the accumulation of assets for that, and the hedging of country risks. In outflow there are exclusively statistical operations such as the Finance Ministry placing some National Welfare Fund monies with VEB at the end of last December. VEB then turned around and put $3.5 billion into short-term assets, which had an impact on outflow but was not actually such, Ulyukayev explained.
The net outflow of capital from Russia last year came to $38.3 billion, down from $56.9 billion in 2009. The Central Bank predicts anywhere from $10 billion flowing out to $15 billion flowing in this year, depending on how oil prices go.
