Government meeting
Excerpts from Dmitry Medvedev’s opening remarks:
Government meeting
Today we will discuss draft monetary and credit policy guidelines. The Government and the Central Bank believe that macroeconomic stability rests on price stability, which largely determines people’s confidence in the financial system and their long-term plans. Inflation is an issue that is a cause of real concern for the majority people. This year it may exceed 7%, which is higher than we planned.
Political and economic circumstances have changed considerably this year. Capital flight has accelerated. In this situation, we need to use monetary and credit instruments to keep inflation at the lowest level possible. If we succeed, the economy will have internal sources for long-term investment and will have access to loans on reasonable terms.
The Bank of Russia has proposed completing the transition to inflation targeting, with a mid-term target for the growth of consumer prices to be set at 4% annually starting in 2016. By doing this, we will send a signal to people, business, investors and our trade partners, hoping to secure their trust in our macroeconomic policy. This policy should stabilise the rouble and normalise foreign trade settlements.
Dmitry Medvedev: "The Government and the Central Bank believe that macroeconomic stability rests on price stability, which largely determines people’s confidence in the financial system and their long-term plans."
Another issue on our agenda concerns the draft of a long-term development programme of the Federal Grid Company (FGC UES), one of the largest infrastructure companies in Russia, which controls the bulk of our main power transmission lines.
The company is facing challenging goals, including cutting operating expenses by 15% and investment expenses by 30% by 2017, gradually lowering the cost of connecting new customers to the power grids and, lastly, attracting investment into this sector.
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