Chairman of the Russian Central Bank Sergey Ignatyev
Photo: Dmitry Dukhanin
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Think Tank Weighs In on Inflation
The spike in inflation in the last three months is a worry not only for the Kremlin. The Center for Macroeconomic Analysis and Short-Term Prognosis has suggested fighting inflation by curtailing the influx of capital into Russia. Economists expect July's inflation rate to equal 8.8 percent annually and Russian President Vladimir Putin expressed his concern over macroeconomic indicators at the meeting of the government yesterday.
CMASP economists consider “monetary” inflation (inflation that independent of season factors) this year to amount to 3 percent. That is considerably lower than last year at this time. CMASP economists recommend in research just released that the loans taken out by banks abroad be limited by raising the obligatory reserve for such operations from 4.5 percent to 10 percent. In addition, domestic borrowing should be encouraged by making state banks the organizers of large syndicated loans.
The center's recommendations have found mixed acceptance. “Inflation is exclusively monetary,” objected Troika Dialog analyst Anton Struchenevsky, who considers the steps mentioned by the CMASP economists permissible but ineffective. Renaissance Capital's Alexey Moiseev called the center's conclusions “counterintuitive.” Both commentators were in favor of strengthening the ruble to fight inflation.
www.kommersant.com
All the Article in Russian as of July 25, 2007
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