Bloomberg News

Bank Rossii to Finish Move to Targeting Inflation in 3 Years

October 03, 2011

(Describes inflation targeting plan in second paragraph, adds capital outflow forecast in fourth.)

Oct. 3 (Bloomberg) -- Russia’s central bank plans to complete its transition to targeting inflation by the end of 2014, Bank Rossii said.

The regulator will “maintain its presence on currency markets exclusively to limit excess volatility of the exchange rate, without influencing its trajectory as determined by fundamental factors,” Bank Rossii said in a draft three-year plan for its monetary policy published on its website today.

Policy makers are targeting a more flexible ruble to shield the economy from external shocks and make monetary policy more effective. Bank Rossii widened a band in which it allows the ruble to trade to five rubles from four earlier this year. There are no plans to change the corridor in the coming weeks, central bank Chairman Sergey Ignatiev said last week.

Net capital outflows may reach $36 billion this year, up from an estimated $31.2 billion for the first half, according to the plan. Alexei Ulyukayev, a central bank first deputy chairman, said May 31 that outflows may reach $30 billion to $35 billion.

--Editors: Paul Abelsky, Alan Crosby

To contact the reporter on this story: Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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