21 Jul 2023 15:58

CBR's monetary policy is aimed at returning inflation to 4% by end of 2024 - Nabiullina

MOSCOW. July 21 (Interfax) - The monetary policy of the Central Bank of Russia (CBR) is aimed at returning inflation in Russia to 4% by the end of 2024, in 2023 it is expected to be in the range of 5%-6.5%, CBR Governor Elvira Nabiullina said at a briefing following a meeting of the CBR board which raised the key rate to 8.5% from 7.5%.

Nabiullina also noted that the weakening of the ruble has not yet been fully reflected in prices, and inflation expectations remain "unanchored".

"The recent exchange rate movement has not yet been fully transferred into prices. In addition to the direct transfer of the ruble exchange rate movement into prices, we are concerned about possible secondary effects. Exchange rate trends affect inflation expectations of households and businesses - they remain elevated and unanchored, and they rose in July," she said.

"We will closely monitor further trends in inflation expectations and take this into account when making decisions," the Central Bank chief said.

"Taking into account all factors, we have raised the lower bound on inflation for the current year by 0.5 p.p., inflation [in 2023] will amount to 5%-6.5% [the previous forecast was 4.5%-6.5%]," Nabiullina said.

"The ongoing monetary policy will limit the scale of deviation of inflation from the target and will be aimed at bringing it back to 4% by the end of next year," she said.