According to preliminary data, inflation will not exceed 1 percent in Russia in May 2003, Russian Central Bank's Chairman Sergey Ignatyev announced at a conference organized by Renaissance Capital. Ignatyev said that in May 2002 inflation amounted to 1.7 percent. According to him, the Central Bank has good chances to keep inflation within 10 to 12 percent from June to September 2003. He also confirmed the Bank's plans to prevent ruble strengthening by more than 6 percent by the end of 2003, despite high oil prices.
Ignatyev reiterated that from the beginning of 2003 until May, the volume of gold and currency reserves surged by $15bn against a $12bn rise during the whole previous year. According to the Central Bank's Chairman, this situation is disadvantageous for reducing Russian banks' compulsory reserves. At present, the rate for compulsory reserves ranges from 7 to 10 percent. This rate is higher than in other countries and is causing well-founded complaints by Russian banks, Ignatyev pointed out. He also said that although the Central Bank intended to lower the rate for compulsory reserves in future, it would not do that by increasing gold and currency reserves and the money supply.