UPDATE: Nabiullina: Higher key rate doesn’t hinder econ growth

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ST. PETERSBURG, Jun 3 (PRIME) -- A higher key rate of the central bank does not hinder Russia’s economic growth, demand has almost recovered, the regulator’s Chairwoman Elvira Nabiullina said at the St. Petersburg International Economic Forum on Thursday.

“We have started to return to a neutral monetary policy, and delaying such moves can result in the necessity of raising the rate faster and higher, which we can encounter later. In our opinion, it does not hamper economic growth. We can see that demand has almost recovered,” she said.

Russia’s inflation becomes more stable, Nabiullina also said.

“We believe that inflation has a significant amount of stable components. We have a higher inflation and higher inflationary expectations,” she said.

Russia’s inflation is likely to speed at the beginning of the summer, then reach the plateau and slow down closer to the autumn, Nabiullina also, adding that the central bank expects the effect of administrative regulation of food prices at below 1 percentage point.

“We do not project a leap (in inflation after the food price stabilization agreements expire), but we will monitor the situation,” she said.

She also said that the central bank’s board of directors will consider increasing or maintaining the key rate at a meeting on June 11.

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