Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bank Rossii Mulls Three Anti-Inflation Weapons, Ulyukayev Says

Dec. 1 (Bloomberg) -- Russia’s central bank is considering “all possible reactions” to demand-driven inflation, First Deputy Chairman Alexei Ulyukayev said.

“As soon as we see some growth” in demand-side inflation, Bank Rossii could react on three fronts, Ulyukayev said today in an interview in London. “First, the policy rate; second, the reserve requirements and third, the exchange rate performance. We’ll be watching the situation and make our decision accordingly.”

Annual inflation accelerated to 7.5 percent in October, the highest since January, after the worst drought in at least half a century hobbled agriculture and drove up food prices. Inflation risks “due to monetary factors” are at an acceptable level, the central bank said in a statement on Nov. 26, when it kept its main interest rates at a record low for a sixth month.

Bank Rossii also said the annual inflation rate rose to 7.8 percent through Nov. 22, exceeding the bank’s benchmark 7.75 percent refinancing rate. The regulator retracted a pledge to keep its main rates unchanged “for the coming months.”

“This means that we now feel this monetary side influencing inflation,” Ulyukayev said today. “This means that we free ourselves to change policy in case it’s necessary.”

Policy makers may raise their main interest rate by a quarter point to 8 percent by the end of March in what would be the first increase since 2008, according to the median estimate of 19 economists surveyed by Bloomberg.

The central bank is still “thinking about it,” Ulyukayev said. “I’m not going to say if it’s likely or unlikely.”

Exchange Rate

Russia will continue to move toward “more flexibility of the exchange rate,” Ulyukayev said. The central bank may do this by widening the operational floating corridor within which the ruble trades against the target dollar-euro basket and by changing the amount of currency the central bank buys and sells when it moves the boundaries of this corridor, he said.

The corridor was 33 to 37 rubles on Nov. 26, according to the central bank. This compares with a corridor of 32.8 to 36.8 on Oct. 13, Ulyukayev said in a Nov. 24 interview.

Bank Rossii has managed the ruble against the basket since 2005. The basket is calculated by multiplying the dollar-ruble rate by 0.55, the euro-ruble rate by 0.45, then adding them together. The central bank buys and sells foreign currency to keep the ruble within the corridor and limit swings that erode the competitiveness of producers.

The central bank won’t take “any radical steps” to reduce interventions and will “move step by step” in increasing flexibility, Ulyukayev said today, adding he is “not really” concerned about the bank’s moves draining ruble liquidity.

“The amount of free liquidity, of course, decreased but it’s still a big figure,” he said. “If the situation will continue to be like that we will get more concerned.”

To contact the reporters on this story: Agnes Lovasz in London at Maria Levitov in Moscow at

To contact the editor responsible for this story: Willy Morris at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.