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Russian Central Bank forecasts quarterly increase in Russia’s GDP by 2015 end

June 08, 2015, 12:10 UTC+3
According to the bank chief, inflation is currently under control, stagflation risks have passed
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Central Bank of Russia

Central Bank of Russia

© Anton Novoderezhkin/TASS

MOSCOW, June 8. /TASS/. The Russian Central Bank forecasts quarterly increase in Russia’s GDP by 2015 end, the Russian Central Bank Chief Elvira Nabiullina said Monday.

"If there are no new shocks by the end of this year, we expect to see quarterly economic growth ," she said.

According to Nabiullina, inflation is currently under control, stagflation risks have passed.

"The current situation is complicated by the fact that the economic downturn coincided with high inflation. We have warned about possible stagflation, knowing that it is the word no one likes and does not want to say. There was an obvious risk of such development. But so far we have managed to get inflation under control," she said.

"Over the last 6 weeks the weekly inflation remained at the level of 0.1%. According to our estimations, the inflation peak has passed. We predict its noticeable decrease in the future, but the inflation risks, however, still exist," she said, adding that the normalization of monetary policy in the United States, which may increase the volatility of all currencies in emerging markets, and the risk of accelerated indexation of natural monopolies’ tariffs are among those risks. Another uncertainty factor is oil prices, Nabiullina added.

Currency interventions

The Bank of Russia spent $83.5 bln for currency interventions in 2014, the Central Bank's chairperson went on to say.

"We continued currency interventions in the beginning of the last year and supported the rate in order to cool down the market’s reaction to Crimean events and to support the ruble rate. We spent about $83.5 bln for interventions in 2014 on the whole," Nabiullina said.

The Central Bank bought slightly more than $3 bln to replenish international reserves in May - June 2015, she noted.

"Ruble strengthening started and the situation even made possible for us to begin restoring gold and currency reserves. We are buying currency on the market and purchased slightly more than $3 bln in May - June," Nabiullina said. The gold and currency reserves recovery program announced by the Central Bank of Russia is a long-term one, she added.

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