10 Dec 2010 18:41

Central Bank would be right to raise refi rate for a whole - Kudrin

MOSCOW. Dec 10 (Interfax) - The Central Bank of Russia would be right to raise the refinancing rate for a brief period due to accelerating inflation, Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, told reporters.

"We could perhaps do this, it would be right," Kudrin said, commenting on the recent statement by CB Chairman Sergei Ignatyev, who said the refi rate might be raised in Q1 2010.

"This is a reflection of short-term factors, and all cause by the drought [and price growth]," Kudrin said. He said he hoped inflation would start to trend down again in the mid term.

"I'm an advocate of the fact that a low interest rate is an economic growth factor, but now we're in a situation where rates are lower than inflation," Kudrin said. He said inflation would be 8.4%-8.5% for the year, but the refinancing rate was currently 7.75%.