MOSCOW, June 5. /TASS/. Russian companies have stopped raising prices, and the recorded decline in inflation in May creates the conditions for easing monetary policy and reducing the key interest rate, President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin told TASS.

"Prices have begun to fall. According to our surveys, far fewer of our member organizations are reporting price increases from their suppliers, and they themselves are not planning to raise prices either. This essentially means the objective has been met. Although inflation is still hovering around 10% year-on-year, we observed a clear downward trend in May. That is why we believe it is time to demonstrate flexibility in exchange rate policy and monetary policy. A step toward loosening these policies is possible. In particular, a 1 percentage point cut in the key rate would send an important signal. It may not bring about real changes in access to credit resources, but it also would not trigger a resurgence in inflation," Shokhin explained.

At the same time, he noted that companies are registering a growing number of problems, including the curtailment of investment programs and difficulties in relations with suppliers, which have led to delivery delays.

"Moreover, the high interest rate is prompting many to hold on to their cash rather than make contractual payments, preferring to keep it in deposits and earn income from that. And prices, incidentally, have begun to fall," he added.