CORRECT&UPDATE: Cbank affirms Russia’s 2016 CPI at 7% on $35 oil price

(Corrects headline, lede, second paragraph to say that in fact central bank still expects 2016 inflation at 7% under stress scenario, not baseline one. Adds more data in last three paragraphs)

MOSCOW, Jan 13 (PRIME) -- Russia’s consumer price index (CPI) will stand at 7% in 2016 under a stress scenario envisaging an average annual oil price of U.S. $35 per barrel; and at 5.5–6.5% under a baseline scenario implying $50 per barrel, Igor Dmitriyev, head of the central bank’s monetary policy department, said Wednesday at the Gaidar Forum.

“By the end of 2016 (inflation will stand at) 7% under a stress scenario,” Dmitriyev said, confirming previous forecasts.

Earlier, the regulator also projected annual inflation to fall to a target level of 4% in 2017 if oil stands at around $50 per barrel. In December, it said that a long period of oil prices below $40 per barrel bears significant risks for the forecasts.

For now, the central bank sees no reason to revise its stress scenario despite the possibility of this scenario becoming real is now higher, he said. “It (the possibility) is rather higher at present against December, but in principle, under the baseline scenario we said that oil prices will remain low within December–January. There is no serious deviation from the baseline scenario as well, but the possibility is sure increased.”

The authority may toughen its monetary policy if the risk scenario comes to life, he added. “It is important to understand that toughening of the policy does not always imply an increase of the (key) rate…If the risk scenario (of oil price at $35 per barrel in 2016) is implemented then the monetary policy could be made stricter,” he said.

The bank’s board of directors will hold a meeting on the monetary policy on January 29, but it is unclear now whether some adjustments will be made then, he said.

End