16 Jun 2023 14:09

Presidential aide considers it possible to maintain inflation at target levels by increasing supply rather than tightening monetary policy

ST. PETERSBURG. June 16 (Interfax) - Russia currently has annual inflation of 2.9%, and has a smoothly increasing trend, with the best scenario being to control inflation at target levels through an increase in supply rather than raising rates and tightening the monetary policy, and this option is possible, Russian presidential aide Maxim Oreshkin told reporters in on the sidelines of the St. Petersburg International Economic Forum (SPIEF) 2023.

"We need to look at the real situation. In fact, we now have inflation of 2.9% [YTD on June 13], with a smoothly increasing trend. We need to watch this trend carefully. First, we would like the reaction not to be on the part of the Central Bank, such as raising interest rates and tightening monetary policy, but, rather, in terms of meeting demand in the economy with the appropriate supply on the part of the government," Oreshkin said, commenting on whether he shares the position of the Central Bank of Russia (CBR) on the existing risks of the economy overheating.

If this task is completed, inflation should remain low, and the Central Bank would be able to continue controlling inflation at the target levels without any aggressive actions," Oreshkin said.

Oreshkin answered affirmatively "yes" in order to clarify whether he sees the possibility of implementing this option.