Nabiullina: Central bank may revise inflation target in 2021

MOSCOW, Jun 30 (PRIME) -- Russia’s central bank will make a monetary policy review this year, within which it will discuss the inflation target and the operating procedure for monetary policy, Chairwoman Elvira Nabiullina said at the International Financial Congress on Wednesday.

“Changes in the economy, in the expectations and behavior of people and businesses may require adjusting all types of central bank policies, including monetary policy. Most central banks, primarily those which follow inflation targeting policies, therefore periodically conduct an in-depth analysis of their goals and tools. What is usually called a monetary policy review, or in Russian a review of monetary policy. This year we want to carry out such a procedure, too,” she said.

At present, the central bank’s inflation target is near 4%.

The growth of inflation in Russia and in the world is caused by stable factors and requires firmness from the Russian central bank in returning inflation to the target, Nabiullina also said.

“Russia is in the forefront of countries where the economy is recovering quickly, it has already reached pre-crisis levels. The economy is close to its potential. And maintaining a soft monetary policy would no longer help growth, but would only stimulate the formation of bubbles. The growth of inflation, both global and caused by internal rather stable factors, requires us to be firm in returning inflation to the target,” she said.

Mortgage lending in Russia may grow by over 20% this year, Nabiullina also said.

“According to our estimates, growth in mortgages may exceed 20% by the end of the year. Soft monetary policy and the government's preferential mortgage program have warmed up this market,” she said.

Nabiullina also warned of the danger of overheating in consumer lending in Russia saying the growth rate in this segment by the end of the year may reach 20%.

“The danger of overheating in consumer lending is also real. Growth could reach 20% this year, and people's incomes are not recovering as quickly,” she said.

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