Inflation will reach its peak in the second quarter of the year - Central Bank chief

Inflation will reach its peak in the second quarter of the year and then start going down, said Russia's Central Bank chief Elvira Nabiullina.

"The Central Bank has been doing all it can to beat down inflation which was influenced by objective factors. Our current forecasts indicate that inflation will reach its peak somewhere in the second quarter. It will then start moving down and return to more habitual and clear levels as early as the beginning of the next year," she said on the Sunday Time program on Channel One, broadcast to Russia's Far East on Sunday.

The current wave of inflation has formed under the impact of strong, but "one-time" factors, she continued.

"The ruble's weakening observed at the end of last year has passed. It will have a stretched-out effect, which will abate, however," Nabiullina said.

She also said that the Central Bank was well aware, as it was lowering the key rate, that the ruble could somewhat weaken. However, the currency market is being influenced not only by the interest rate, but, above all, by the oil price, she added.

"We can see that the price grew a little at the end of the week, and we do not see any major factors that would influence the ruble's decline. Why? Because the drop in oil prices observed - the third largest drop over the past 40 years, by 60% - impacted the ruble's exchange rate, of course. Another factor of influence is that our companies needed to make large payments on their foreign debts. But in our opinion, there are far more prerequisites for the ruble's strengthening than for its weakening," Nabiullina said.

She said 15% was a high interest rate for a large number of branches and companies, therefore special programs were needed to support companies which have a growth potential, or which have found themselves in a particularly vulnerable situation.

"The Central Bank has its own special instruments to support term lending, and instruments that have to do project financing, small and medium businesses, and non-raw materials exports in conditions of our interest rates," Nabiullina said.

Read more: Intl rating can't influence Russian economy - Central Bank chief

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