Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19
Palladium, Darling of the PGEs, Shifting into High Gear - 13th April 19
MMT is a spectacularly Dem idea - 13th April 19
The 'Silver Lines' of Opportunity - 13th April 19
Gold Stocks Bull Market Breakout Potential - 13th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Russia's Central Bank Concerned About Price Inflation Tsunami

Economics / Inflation Dec 12, 2010 - 08:35 AM GMT

By: Pravda

Economics

Sergey Ignatyev, the head of the Russian Central Bank, did not exclude a possibility to raise the official bank rate next year to curb inflation. Ignatyev forecast the growth of crediting and the economy in 2011 by 20 and 5 percent respectively.

In November, the board of directors of the Central Bank (CB) decided to preserve the level of the official bank rate and interest rates on CB operations. The official bank rate was preserved on the level of 7.75 percent per annum on June 1, 2010.


To curb inflation, the CB will use interest rates and reserve requirements. The latter should work in case of the influx of credit assets from abroad, since CB's interest rates are incapable of affecting the rates of the banks that attract funds from other countries.

January is a traditional month of high inflation in Russia. The driving force here is raising the tariffs of monopolies. The new year will see the consequences of poor harvesting in the world that spurred food inflation. Some experts believe that Russia will have to face the price tsunami next year for the first time in 3-5 months.

According to experts' estimates, the price growth in December will make up 1.0 percent, whereas year-end inflation is not likely to drop below last year's 8.8 percent. The price tsunami is expected during the upcoming months, though.

The head of the Central Bank also said that Russia's balance of payment was still positive, which supported the ruble rate. Oil prices have been growing steadily recently; some analysts say that it may soon hit the forgotten $100 per barrel.

In November, Russian banks increased their credit volumes provided to corporate borrowers and the population by 1.4 and 1.7 percent respectively. Past-due payment on the credit portfolio in November decreased by approximately one percent.

Russian economic experts say, though, that disbalance in the Russian banking system has been growing. The index of banking system disbalance reached the level of 1.08, which is the highest point since the crisis in October 2008, when it was registered on the level of 1.14.

To calculate the index, they consolidate balance of accounts on interbank credits in all credit organizations. The result is then corrected to the amount of transfers inside groups of banks and correlated with the total value of liabilities of the banking system.

The growth of the system risk entails the growth of rates of the financial market. If the Central Bank raises its rates, the growth of the volumes of crediting will be complicated except for the sector of consuming credits and the aspiration of the state to run into debts.

Boris Yaremenko

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules