Central Bank: Russia's economy at peak of overheating

The Russian economy is currently at the peak of being overheated, head of the Bank of Russia’s monetary policy department Kirill Tremasov said.

"I think that the peak of economic overheating is the top point of the business cycle somewhere here, we are somewhere nearby, though what trajectory the slowdown and cooling of demand will take remains a matter of our careful study," Tremasov said.

According to him, this is a question that was one of the important points of discussion at the last board of directors meeting, whether we have passed the peak or not. Judging by inflation, Russia has passed it, the head of the regulator’s monetary policy department added.

"If you remember, the current rate of price growth in the autumn, the speed at which prices change, was double-digit. After we hiked the key rate to 16% per annum, price growth decelerated sharply. In recent months, prices have grown by an average of 6%-7% per annum. Inflation has slowed down, though it has not yet returned to the target," Tremasov said.

He noted the Bank of Russia can raise the key rate by more than 1 percentage point, if necessary.

"The increase may be more than 100 basis points if the situation requires it. Our policy continues to be aimed at ensuring price stability," Tremasov said.