Cbanker: Cbank confirms medium-term oil price outlook at $40

WASHINGTON, Oct 13 (PRIME) -- The central bank maintains a medium-term oil price at U.S. $40 per barrel in its baseline forecast, First Deputy Chairwoman Ksenia Yudayeva told reporters late on Thursday.

There are factors, including hurricanes, which pushed the prices higher, but the central bank has not yet discussed how temporary these factors are and how stable the current prices are, she also said.

“At the next meeting and later in December, I think, we will discuss whether the scenario needs a revision,” she said.

The official said that sporadic factors like a rise in oil prices and a fall in prices for vegetables have slowed Russian inflation down by 1-1.5 percentage points, but it will return to 4% in 2018 after the factors weaken.

It will take the central bank about 2-3 years to reduce households and businesses’ inflation expectations, she said.

“It is important to cut and anchor inflation expectations soon so that the economy could benefit from low inflation… Generally, 2-3 years is enough,” she said.

The official also added that the central bank’s policy influences inflation with an about 1-year lag.

“We need to assess different factors, which will influence inflation during a year, in different scenarios, and to adjust our policy correspondingly.”

The central bank’s steps to bail out large private banks will not hurt the key interest rates, Yudayeva also said.

“There will be no impact on inflation. We control inflation well enough now. I believe we will not see any effect on the key rates,” she said.

The central bank announced bailouts of Otkritie FC Bank and B&N Bank on August 29 and September 21 respectively, and it is now the main owner of the banks under a new mechanism to provide support to large privately-owned banks in trouble.

“Now it looks like the factor makes no significant influence on anything,” the official said, when asked whether the bailouts may influence the central bank’s decision to cut the interest rate.

On Wednesday, Central Bank Deputy Chairman Vasily Pozdyshev said that the central bank is unlikely to return funds spent to bail out Otkritie Financial Corporation (FC) Bank and B&N Bank after their sale.

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