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Russia dep c.banker: 2011 inflation target hard to reach

Published 01/20/2011, 10:12 AM
Updated 01/20/2011, 10:16 AM

LONDON, Jan 20 (Reuters) - Russia will find meeting its 6-7 percent 2011 inflation target "very difficult", first deputy chairman of the central bank said on Thursday.

Inflation risks in the first half of 2011 were higher than risks to the country's growth rate, Alexei Ulyukayev said.

Russia would use a combination of reserve requirements, interest rates, and other tools, to curb inflation. Ulyukayev also told reporters on the sidelines of an investment forum, "I'd say a moderate rate of rouble appreciation wouldn't be harmful. I think 7-9 percent a year is acceptable. A higher figure than that could be harmful. For that we should be careful with fiscal spending."

Ulyukayev said last week Russia may continue tightening monetary policy while allowing more exchange rate flexibility this year.

The central bank meets later this month. It raised deposit rates by 25 basis points in December, to 2.75 percent.

(Reporting by Sujata Rao; editing by Carolyn Cohn)

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