Russia should aim for reducing inflation to 4 percent, but no lower, Russia's Central Bank chief, Elvira Nabiullina, said in an interview with Forbes.
Nabiullina's target inflation rate is higher than the 2 percent rate common in most developed countries, but decreasing inflation any further could cause new problems, she believes.
"Mass deflation is dangerous," she said. "It decreases the stimulus for investment. In order to avoid this, the inflation level should be around 4 percent." Inflation above 4 percent will also halt investment, she added.
The Central Bank's goal should now be ensuring stable, low inflation and, as a result, stable and low interest rates on loans. These factors are more important than the ruble exchange rate, Nabiullina said.
Russia's annualized inflation for 2016 stands at 6.09 percent, according to the StatByuro statistical website. The Central Bank aims to reach its 4 percent target in 2017.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
