Central Bank May Raise Rates

The Central Bank may raise interest rates again to slow inflation, bank deputy chairman Konstantin Korishchenko said Tuesday.

"I cannot rule out the possibility of a change in rates, including an increase," Korishchenko said in comments broadcast by the state-run Vesti-24 television.

The Central Bank raised its main interest rate one-quarter of a percentage point on Feb. 4, in an effort to slow consumer-price growth.

Inflation accelerated to 11.9 percent in 2007, the highest level in four years, from 9 percent the year before.

"Abundant volumes of short-term liquidity" from high inflows of export dollars and inflation make the "refinancing rate totally ineffective against price increases," UralSib chief economist Vladimir Tikhomirov said.

Interbank one-day lending rates remain below the Central Bank's refinancing rate, seen as a ceiling for borrowing money and a benchmark for calculating tax payments. The refinancing rate is currently 10.25 percent.

The Moscow Interbank Actual Credit Rate, known as MIACR and calculated as an average of rates set daily by banks, was 4.53 percent on Feb. 18, according to the Central Bank's web site.