Central Bank planning to reduce inflation rate

In the next three years, the Central Bank's main efforts will be directedat decreasing the annual inflation rate to 8 percent, the Central Bankreported. The Bank's project on main directions of the credit and monetarypolicy in 2003 will be considered at a government meeting on August 14.According to this document, the forecasted inflation rate will be from 9 to12 percent next year. Moreover, this document was elaborated on taking intoaccount two scenarios of development of the world economy. According to thefirst scenario, its growth will be 2 percent a year. The second variantstipulates a 3 percent or 3.5 percent advance. As a result, the growth inRussia's gross domestic product is expected to be 3.5 percent, according tothe first scenario, or 4.4 percent, according to the second scenario. Anadvance in investments is expected to be 6.3 percent or 7.5 percent.Individuals' incomes are to gain 5 percent or 6 percent. The dollarexchange rate will be 34 RUR/USD, according to the pessimistic scenario, or33.7 RUR/USD, according to the optimistic scenario. Moreover, the CentralBank believes that the monetarization level will remain at about 82percent.Promotion of the interest rate's role is also one of the priorities for theCentral Bank. Moreover, the Bank plans to continue the 'fluctuatingcurrency exchange rate' practice.Among priorities of the monetary and credit policy of the Central Bank isthe creation of a system of guaranteed deposits, the introduction of theInternational Accounting Standards, the adoption of bills aimed at thecreation of favorable conditions for banking activities and optimization ofregulating and supervisory procedures of the Central Bank. .

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