Inflation expectations in summer will likely continue to decline along with current inflation - Nabiullina
MOSCOW. June 5 (Interfax) - Inflation expectations will likely not remain anchored and should start to behave more stable than could be expected under the current conditions, while they will likely continue to decline along with current inflation in the summer, Central Bank of Russia (CBR) Governor Elvira Nabiullina said during an online press conference on Friday.
"Inflation expectations are a very important parameter at which we are looking. Our space in taking decisions on monetary policy could be limited by the fact that inflation expectations are either too high or not anchored. They remain unanchored, but I must say that they are behaving more stable than we could have anticipated. Despite the recent economic shocks, inflation expectations have risen, but not so significantly, and they have begun to adjust rather quickly," the CBR governor said.
"We anticipate that inflation expectations by summer will continue to decline along with a decrease in inflation. Why do inflation expectations remain unanchored? They are too sensitive to current inflation, yes, and they remain unanchored, and it will take a longer time for them finally to become anchor; however, since we anticipate a decline in inflationary pressure, disinflationary factors, we anticipate a decline in inflationary expectations as well," Nabiullina said.
When speaking about the lower barrier to inflation expectations, Nabiullina noted that, "it is now very difficult to draw conclusions about this. I do not think that we will break through some lower threshold in this regard."