Cbank sees 2018 inflation at 3–4%, to revise forecast in June

MOSCOW, May 21 (PRIME) -- The Russian central bank plans to revise its inflation forecast for 2018 in June, but inflation will remain in the range of 3–4%, First Deputy Chairwoman Ksenia Yudayeva said on Monday at the State Duma, the parliament’s lower house.

“Our forecast is that inflation will gradually return to 4% once short-term and more long-term factors deplete. We will revise the forecast in early June, but on the whole we see that inflation will amount to 3–4% by the end of the year, gradually approaching 4%,” she said.

The situation in Russia looks more favorable and controlled than on other developing markets, Yudayeva also said.

“The volatility on financial markets was at historically low levels, and Russia was no exception. The volatility of markets, exchange rate significantly decreased, in fact returned to the figures that were observed when the currency rate was not yet fully floating,” she said.

“There was some pressure in Russia in early April after the introduction of sanctions of the last wave, but on the whole, our situation looks much more stable and controlled than in other countries with developing markets,” she said.

Yudayeva also said that the central bank is considering raising risk ratio on foreign currency loans for banks.

“It became clear that banks and borrowers very often underestimate currency risks when they take out such loans. We still see many problems in the banking system with such loans disbursed before 2014–2015,” she said.

The central bank also expects that calculation of debt burden will become mandatory for Russian banks from January 1, 2019.

“We’ve already developed an indicator of debt burden. We’ve developed a relevant legal act and started primary collection of the indicator from the banking sector. We expect that it will become mandatory from January 1, 2019,” Yudayeva said.

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