UPDATE: Chair: Russian cbank to keep inflation target close to 4%

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MOSCOW, Sep 15 (PRIME) -- The Russian central bank sees it unnecessary to set a target range for inflation and sees 4% inflation as a constant target, Chairwoman Elvira Nabiullina said at a briefing on Friday.

“Inflation has reached 4% and we would like to refine the description of the goal. Our goal is inflation close to or about 4%. Why close? Because it can fluctuate around, or be higher or lower than 4%,” Nabiullina said.

The idea of a target range was discussed but dismissed, she said. “We will be analyzing and explaining the patterns of factors influencing the price dynamics in every case.” “They can be of a varied nature, of a varied timescale of activity. We will be implementing correcting measures only in case of risks of a significant and constant inflation difference from the goal.”

The central bank sees inflation permanence at the current level of about 4% as stable, she said. The forecast for the end of 2017 is 3.5–3.8%, she said.

The central bank has only begun to stabilize prices because in order to advance it will need to stabilize inflation and inflation expectations, and strengthen the trust in central bank’s policies.

The situation in the economy and on the labor market is stable. “The situation in the economy and on the labor market, where unemployment has stabilized slightly above 5% is close to balance in our estimates.” Inflation is decelerating despite economic growth which continued in July–September.

There are no significant deflation risks in the years to come, she said. “As regards our possible contrary actions to stimulate inflation, this is possible in case inflation is constantly, significantly lower than 4%. In this case this is possible. This is not the case now, we do not see this.”

The central bank still expects oil prices to fall in January–June 2018 and to remain at U.S. $40 per barrel.

The current account balance is expected to remain in a slight surplus in 2018–2020 and is unlikely to have effect on the currency exchange rates.

Nabiullina also said that there are no risks of significant ruble fluctuations.

The central bank expects that the key rate will be reduced to 6.5–7.0% in 2019, she said.

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