Elvira Nabiullina: Review of recent inflation developments in Russia
Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board
of Directors meeting, Moscow, 24 March 2017.
* * *
Today the Bank of Russia Board of Directors decided to reduce the key rate to 9.75 p.a.
The economic situation is more favourable than we expected in December 2016. The upturn in
the economy has started earlier and is progressively gaining sustainability. The balanced growth
in supply and demand exerts no considerable inflationary pressure. Inflation is slowing down
faster than we predicted. Inflation expectations continue to go down. These developments favour
a change in the key rate. We reduced it today by a quarter percentage point and we are looking
into further cuts in the second and third quarters of this year.
At the same time, we need to be convinced that the positive trends will gain momentum. We
need to see inflation not just slowing down, but anchoring near the 4% target. Therefore, inflation
expectations should be anchored at this level. Inflation risks have abated somewhat for now, but
they may materialise over the forecast horizon. Therefore, we will reduce the key rate
progressively in the medium term and are likely to take short pauses while sticking to moderate
tightness in our monetary policy. We will mostly rely on our pivotal meetings when we update and
release our macroeconomic forecast whereon our decision is based. Having said that, we do not
rule out that a decision may be made at one of our intermediate meetings.
Let us have a closer look at the factors behind today's decision.
First, inflation has slowed down considerably. It stood at 5.4% in late 2016 and fell to 4.3%
as of 20 March. It is very close to the 4% target.
Inflation reduction is driven by a number of factors. Price growth is primarily checked by slack
consumer demand. Some indicators suggest that it started to slowly recover in early 2017.
However, overall households retain the propensity to save, of which deposits are indicative.
Incentives to save are supported by positive real interest rates.
Lowering inflation expectations also slow down consumer price growth, though they are still high.
Expectation indicators sometimes wobble up and down and we speak about their volatility.
Having said that, the most important development is that a downward trend has entrenched.
The ruble appreciation triggered inflation to reduce faster than forecast. It has affected all goods
and individual services in recent months, especially food prices. Prices for some products, such
as fruit and vegetables, even dropped, because they quickly respond to a changing environment.
That said, it also means that the situation may abruptly reverse for such goods. Exchange rate
movements also decelerated growth in non-food goods and service prices.
Another factor is heavy crops last year and in 2015. They have left stocks of farm produce which
drag down prices for some food products. This effect was expectable but proved to be stronger.
The contribution of exchange rate fluctuations and heavy crop to inflation slowdown may decline
in future. We took this into account when choosing the scale of key rate reduction.
The Bank of Russia maintains a focus on the analysis of inflation trends in the regions. Although
most regions are enjoying slower inflation, it still varies considerably. February data suggest that
annual inflation in the regions ranged between 1.9 and 6.4%. Differing readings for price growth
across regions are explained by a number of factors including households' capacity to pay, the
level of competition, industrial specialisation and the policy of local authorities. Monetary policy
checks overall inflationary pressure; yet, regional differences will persist, albeit, as we foresee,
will diminish progressively.
Inflation may also vary across households with different incomes. Early last year, these
differences became stronger. This year we are witnessing lower inflation almost in all income
groups, except for highest income households. Inflation in medium and low income households
is approaching the 4% target, which is certainly a positive trend. This lays the groundwork for
soundness of households' savings and incomes.
Second, a more sustainable economic recovery does not trigger inflationary pressure.
The updated Rosstat data suggest that the downturn in the Russian economy was not so deep
in 2015-2016 and the economy saw a recovery earlier than expected. If we compare this
situation with the overall economic crunch of 2008-2009, we can see that GDP dropped over
10% at the time, while in 2015-2016 it contracted by slightly more than 3%, given that the oil
price drops were similar. We will be able to revise our estimates in April, when Rosstat publishes
its updated statistics for 2016. Preliminary estimates suggest that GDP started showing quarterly
growth as soon as 2016 Q2 (Q3 according to previous estimates). Annual industrial production
growth entered positive territory in the first quarter of last year. Estimates of industrial production
statistics for the beginning of this year need calendar adjustment. This February is two working
days shorter than last year, which results in different volumes. If adjusted for this factor, industrial
production continued to expand, adding more than 1% YoY in February. This calendar effect will
also manifest itself in overall Q1 readings.
After a long period of instability, we can see clearer signs of investment recovery. Production
and imports of investment goods are growing. Surveys confirm that investment demand is on the
rise. Businesses are building up stockpiles as they expect demand to recover. These
expectations may soon prove right. We predict consumption to increase in annual terms as soon
as the second quarter. It will come after expansion in production and will not create inflation risks.
Third, the short-term risks stemming from Finance Ministry operations have not
materialised.
As we were making the key rate decision in February, the Finance Ministry was then yet to
launch its forex operations as part of the budget rule. It was difficult to gauge the envisaged
impact of such operations. The Finance Ministry-conducted purchases of foreign currency could
have fomented a short-term deterioration in exchange rate and inflation expectations. Given a
number of risks including these, we toughened our rhetoric at the time. To date we see that the
foreign currency market has remained steady. The impact of these operations on the ruble
exchange rate was immaterial if its strengthening factors prevailed.
Fourth, the updates to the outlook are mainly related to 2017, with the mid-term
prospects for economic development unchanged.
A conservative approach to the baseline scenario assumes oil prices to drop to $40 a barrel by
the end of 2017. In this case, the average annual oil price will hold near $50 in 2017, that is, well
above the previous scenario's assumptions. It would be difficult at this point to make a definitive
forecast as regards the potential extension, in the middle of the year, of oil producers' output cut
deal. This is indeed an uncertainty factor. Oil prices may also be under downward pressure
coming from rising outputs of shale oil, as well as a potentially stronger dollar on the back of the
US Fed rate rise.
In a scenario when we see oil prices slump from the current relatively high levels, both business
and household expectations are set to be negatively affected for a time. However, we expect no
reversal in the current positive economic trend. We cannot rule out a certain slowdown in the
paces of growth between late this year and early next year; yet subsequently, the economic
trends of today will prevail. Businesses will be gradually building up investment as they capitalise
on their profits accumulated in prior years. The real sector's ability to borrow will also improve
over time. Alongside with softer monetary conditions, this will give extra impetus to growth in
investment. Consumer demand will recover gradually on the back of growing revenues and
improving expectations. This process is expected to be smooth and create no inflation risks. The
recent strengthening in the ruble is set to bring about increased demand for imports in the first
half of 2017. Moving forward, however, this growth is on course to become slower; in this way,
exports are set to grow at moderate paces.
In 2017-2018, economic growth will total about 1-1.5%, with acceleration to 1.5-2% envisaged as
early as 2019. Still, potential economic growth will be invariably constrained by structural factors.
Following this recovery period, paces of GDP growth are expected to be equal or less than
1.52%.
The current account balance is expected to rise in 2017, prompted by higher oil prices. It will
decline in the course of 2018, triggered by a slump in oil prices that the forecast assumes.
Capital outflow will remain low and under $13 billion helped by, among other things, a drop in net
external corporate debt payments.
Banks are expected to fully pay out their forex repo debt in the course of 2017, which is
estimated, alongside the Finance Ministry-conducted foreign currency purchases, to help foreign
currency reserves grow by as much as $23 billion.
The baseline scenario assumes that a reduction in oil prices will trigger no growth in inflation,
which will continue to slow down on track to reach 4% before the end of 2017 and will be
subsequently maintained near this level on condition our monetary policy remains moderately
tight.
Fifth, the risks that we may fail to deliver on the target for inflation by late 2017 have
gone down. The outrunning slowdown in inflation to date is seen as a margin of safety
going forward. At the same time, risks remain that inflation may fail to become anchored
around the target level in the medium term.
We see output prices accelerating growth across several core industries including oil production
and metallurgy. This may have negative implications for costs and, as a result, for the economy
overall. Should the baseline scenario that assumes a correction in oil prices materialise, this
factor is expected to have only a minor and short-lived impact on inflation.
The current inflation risks are also related to the deterioration in some global food markets. In
particular, we currently see growth accelerating in prices for dairy products, meat and sugar.
The tax policy measures under discussion may have pro-inflationary implications, to be
estimated once more clarity is available on the scale of proposed changes.
Also, the risks that inflation expectations will decrease too slowly are still there. It is important to
take into account that inflation expectations are sensitive to other risks materialising, for instance,
to the risks of fluctuating prices in commodity and merchandise markets. These may be affected
by even an upsurge in prices for only individual goods or services - for example, those frequently
purchased. Growing inflation expectations, in their turn, may reinforce the impact of various
oneoff factors on prices. As we look into these trends, we put household expectations in the first
place. On the side of analysts' expectations, these continue to decline and on track to approach
the target level of inflation. This is a truly positive trend considering that companies may well be
guided by analysts' estimates in their decision-making - and it is companies that determine
prices and wages.
As I have mentioned on several occasions before, we are seeking more than a one-time
reduction in price growth to 4%. It is important to anchor inflation near this level in future. For this
reason we call this situation price stability, i.e. sustainably low inflation.
To maintain inflation close to its target level, moderately tight monetary policy may be needed
over a two-three year horizon. This is necessitated by the still high sensitivity of inflation to
oneoff factors, as well as its inertia and elevated inflation expectations. As they stabilise close to the
target level of inflation, prices are expected to be less responsive to various short-term factors.
These new conditions would see no need for additional tightening in the monetary policy stance
to ensure that inflation holds near 4%.
This conservative strategy in monetary policy may appear unattractive short-term; however it will
enable us to deliver on a more sustainable result in the mid-term, that is, deliver on the objective
to establish in Russia a low price and cost growth environment - such that favours both
households and businesses, as well as the overall economy.
Q&A for the Media
QUESTION from Vedomosti:
Given the Bank of Russia's move to reduce the rate and its guidance that further rate reduction is
not impossible in the second and third quarter, does that suggest that the Bank of Russia has
launched a monetary loosening cycle?
ELVIRA NABIULLINA:
An easing cycle is understood as a process of sequential rate reduction, decided at each policy
Board meeting. Having said that, we acknowledge that the sequence of rate cuts may be
interrupted, though this would not run counter to an overall mid-term downward movement of the
rate. We will move forward with care and precision. For the most part we will be largely guided by
economic data as well as, certainly, by our forecasts. Under such uncertain circumstances and
present risks of inflation we are unable to state with certainty that this move constitutes the start
of a recurrent easing cycle, to be continued upon decision at each forthcoming Board meeting.
However, we are not ruling this out as a likely possibility, conditional on a sufficiently positive
outlook.
RIA Novosti's QUESTION:
According to a recent statement issued by the Ministry of Finance, inflation is expected to
decrease to 4% as early as in the first half of the year. In any case the Bank of Russia predicts
that the target for inflation will be hit by the end of the year. Could you please comment on any
risks the Central Bank sees in this potential over-performance? Can the Central Bank have
estimated a divergence, of critical importance, from the target in this case? If so, what is the
extent of this deviation? Is there any risk that inflation will get stuck above 4%? And are there any
risks associated with a rate of inflation of around 3%? Have you made any critical calculations of
a twofold estimate? And if not, when do you intend to do so? Thank you.
ELVIRA NABIULLINA:
Our goal is to ensure that inflation remains around 4%, a target we have always spoken of. In
other words, it is impossible to expect that the rate of inflation will work out to be precisely 4%
every single day. An economy being a living organism, it is only natural for inflation to hover
around 4%, that is, slightly higher or slightly lower on any given day. This figure may appear as
early as this year. This is a completely normal situation, without any indication of risk whatsoever.
This is the way it should be. Risks may emerge only if we see either a substantial or lengthy
deviation in the rate of inflation in either direction from the 4% target.
You will recall that in the early days of inflation targeting this range was defined as 4% plus or
minus 1.5 percentage points. We rejected this range, for the following reason: we did this
because both analysts and market players were of the opinion that we were aiming for a point
outside the middle of this band, with expectations tending towards its upper limit. We decided to
put the plug on this scheme and make known our intentions to ensure a sustainable downward
movement in the rate of inflation towards the target.
However, we leave open the possibility for this variation range to be reinstated once we have hit
our 4% inflation target. Such a range exists in many economies, and it is open to variation. I think
this issue will be on our agenda this autumn as we develop our Monetary Policy Guidelines; at
this time we will look into the need for this range and its potential impact on our communication
policy. Thank you.
QUESTION from Reuters:
Your press release allows for a gradual downgrade in the key rate. Is this to say that a 25 basis
point reduction in future is the new normalcy?
ELVIRA NABIULLINA:
Thank you very much. It is true that we have decided on this magnitude of reduction - 25
percentage points after long time. A short while ago, I floated the idea of a smaller step as we
transition progressively to a single-digit rate. This is understood to be standard practice when the
key rate is below 10%. Yet, this is not to say that each policy meeting will decide in favour of a 25
bp reduction. I leave open the possibility of a further 0.5 bp reduction provided that the right
conditions are in place; however, I envisage that a 0.25 reduction is likely to be more acceptable
in the near future.
QUESTION from Interfax:
Two questions, please. First. Last autumn, the Central Bank issued a public statement that it
was crafting guidance for civil servants, in an effort to mitigate the volatility of the exchange rate.
Can you please update us on the status of this guidance? For which civil servants is this
intended? Does this initiative remain current in light of recent statements that suggest a general
over-strengthening in the ruble and that they weigh in on the exchange rate?
And another question, if I may. Recently, we have heard heavy criticism against Rosstat. What is
the Bank of Russia's view of Rosstat statistics? Do you think this authority should remain
independent, or should it once again be subordinated to the Ministry for Economic Development?
Thank you.
ELVIRA NABIULLINA:
Many thanks for your questions. As for the guidance you mentioned - this is still in the works. It is
not so simple, as we are all accustomed to comment on a variety of processes. This is common
practice when experts, business representatives and governmental officials voice their opinions
on the current economic and forex situation. In other countries these opinions are not usually
referred to as verbal interventions - verbal interventions are normally understood as the
statement of a central bank, and are taken as verbal interventions, as well, possibly, forward
guidance, too.
I think that markets will gradually adopt the right view of such communications, and become
accustomed to them. At the same time, we are looking to develop some general rules in this
area. The idea is to ensure a more careful approach.
On the subject of Rosstat, there are objective complexities. These are understood to arise when
Rosstat makes estimates in the context of significant external changes, which causes structural
shifts to take place. These changes have to be reflected in data series as they unfold - so as a
result we are not immune to recalculations. While we do use the full set of Rosstat data, we have
always drawn on additional data obtained through surveys. Our special focus is currently on
information coming in from regions using our network. Leaders of the Bank of Russia's regional
branches are invited to each of our rate-setting meetings. They update us on the situation in their
regions; ultimately, our estimates and outlooks are not solely based on the data provided by
Rosstat.
Rosstat data should indeed be treated as a reliable source of information, considering that
alongside authorities virtually all market participants also use them. So, the more trust in
Rosstat's professionalism and independence the better. There are a variety of options on how
we may address this. At the end of the day I believe this is up to the Government. I would rather
reserve my judgement here. Thank you.
QUESTION from Bloomberg:
Two questions, again, please. One, following up on the question from my colleague, we heard
both the economic development minister and the finance minister mention that the ruble is
stronger than its fundamental values. In this connection, what does the Bank of Russia make of
this; is the ruble close to its fundamental values, or is it actually stronger?
And my second question, which is in some way related to the first. You mentioned that
purchases of foreign currency are a possible means to replenish reserves, provided these
purchases do not do damage to inflation targets. All indications are, we are on track to meet the
4% inflation target by mid-year. Can the Central Bank launch foreign currency purchases to
replenish its reserves? Thank you.
ELVIRA NABIULLINA:
Thank you. On the subject of the fundamental value of the exchange rate. It's true that this
concept is employed by many experts, and so too by us; we have expressed this on several
occasions. However, this concept must be treated with great care. My view is that this is a very
conditional concept. We at the Bank of Russia have a number of models to measure this basic
reading of the exchange rate. It would be fair to say that we estimate this deviation to be much
smaller than does the Ministry of Finance. According to other models these deviations appear
smaller.
But in any case, what exactly is the fundamental rate of exchange? This is the rate of exchange
necessitated by the current balance of payments, current account and capital outflow combined.
Yet it is anyone's guess to gauge the exact influence of basic and short-term drivers on this
value. This is, as I have previously stated, a very conditional concept. As we see it, in a floating
exchange rate environment, as we see it, no matter what deviations are in place, the impact from
objective factors will ultimately result in an equilibrium which brings the interests of exporters,
importers and borrowers into balance. In our view the issue should be addressed in this way.
Second. Our reserve replenishment policy. Our strategy remains: when favourable conditions
arise we will be able to replenish our foreign currency reserves to boost our safety cushion,
improving both economic resistance to external shock and financial sustainability, with the
understanding that forex reserves are a key instrument. Let me say again though that our current
forex reserves, by international standards, are adequate; they are high.
In this context, we are invariably committed to a policy of supplementing forex reserves only
when we see no risk to our 4% target, nor to this target in the mid-term. This [resumption of forex
purchases] would take place after evaluation of all factors. We have not yet made this decision.
QUESTION from Bloomberg:
Does the regulator support the Finance Ministry-proposed tax manoeuvre whereby VAT would be
raised to 22% and the rate of insurance payments lowered to 22%? Did you take into account
potential changes to the tax system in your forecasts, including monetary policy for this year?
ELVIRA NABIULLINA:
Just as I said, any tax manoeuvre or a change to the tax system may have implications for
inflation, and this should certainly be taken into consideration. It is difficult to provide any
estimates until such a time as we know the magnitude of these moves. A few options and ideas
are on the table, which relate to areas beyond VAT and social payments. There is too much
debate.
Certainly, we have made preliminary assessments of the options. These preliminary estimates
suggest a one-off inflation impact of 1 to 2 percentage points. Moving forward, the impact would
ride on the range of products affected, as well as, among other things, on the timeline: whether it
would be a one-step or a two-step move. The many unknowns in this area prevent us from
making any final estimates.
When making this decision we certainly took into account that potential changes to the tax
system are not impossible. These have been discussed and will be discussed moving forward.
While we are on this subject, we would like to ask the Government to make the parameters of
these initiatives known before they are implemented so these could be reflected in our monetary
policy, enabling a consistent and smooth monetary policy stance. This is what we would like of
the Government in relation to tax reforms.
QUESTION from TASS Agency:
When you reviewed lending to the economy, were you guided by certain adjustments to the
macroeconomic forecast?
Also, could you please comment on capital outflow. Were there any revisions in the three-year
estimate? Thank you.
ELVIRA NABIULLINA:
Yes, we have indeed made some corrections. Overall, as I have noted, our assessment of 2017
is more positive, while 2018-2019 assumptions are unchanged. This does indeed translate into
movement in various indicators.
On the subject of lending, we are expecting growth, and we expect this growth to be gradual and
sufficiently smooth. The banking system's capital stock is adequate to boost lending; we do not
foresee any growth in outstanding liabilities and, at the same time, profits are sufficient to enable
capital buildup. The question is, what procedure will banks use to assess borrowers' risks and
how will demand for capital rise. The current volume of lending is indeed growing, albeit at a very
moderate pace: around 5-7% for this year.
Turning now to capital outflow. As we see it, capital outflow is expected to remain steady - in the
range of $12-13 billion a year over a three-year horizon.
Rossiiskaya Gazeta's QUESTION:
Mrs Nabiullina, the Bank of Russia has recently closed submission of debt load calculation and
use proposals. What feedback did you receive from the market? What is the timeline for the
rollout of this instrument?
And my second question, if I may. You met the People Bank of China's governor, discussing
yuan-denominated OFZ. Did you reach an agreement on investment quotas for our securities?
Thank you.
ELVIRA NABIULLINA:
As regards the rollout of the debt load indicator, we believe this is absolutely the right approach,
and we intend to move forward in this direction. We are still receiving feedback. We will need
time to process and consolidate this feedback. No final conclusions are possible at this point, our
approach being though that this indicator should be enacted; the timeline and details to be
discussed.
As for my meeting with the governor of China's central bank. Yes, we met on the sidelines of the
G20 meeting for finance ministers and central bankers. In our talks we discussed, among other
things, prospects for yuan-denominated OFZ to be issued on the Russian market. We not
support for this idea in principle, with details to be discussed subsequently.
Lenta.ru's QUESTION:
There are concerns in business circles and in the expert community that the ruble is too volatile.
What is the Bank of Russia's view on this matter? What could lead to the Central Bank giving up
the floating exchange rate?
ELVIRA NABIULLINA:
In the foreseeable future, I do not anticipate any factors which would force us to abandon a
floating exchange rate regime. I am convinced that the negative repercussions cited by
enterprises in the real sector of the economy, namely, volatility, are outweighed by the benefits of
this policy. Thus we are saved from any drastic corrections in the exchange rate, which would
then hurt the economy overall, including social expenditures, etc.
Allow me to stress this point again. We are confident that the arrival of the floating rate regime
has in many ways helped the economy adjust to external shocks more quickly than it did in
2008-2009. This is also suggested by the depth of recession. It was the floating regime
arrangement that enabled the real sector of the economy, together with the financial sector, to
adjust to a drastically different environment. This really is an inbuilt stabiliser, and we see that it
does work.
The disadvantage of this approach at the time of its rollout was that this policy decision coincided
with a drop in the price of oil, triggering a surge in inflation, which in turn necessitated a rise in the
rates. But you will recall that we saw a comparable drop in the price of oil in early 2016 which had
almost no impact on inflation. These are signs of an economy which is becoming accustomed to
a floating rate and how it works. In my opinion this is where the floating exchange rate
demonstrated its positive role as an economic adjustment enabler.
We are indeed scared of floating schemes in the economy, explained by the many decades of a
fixed exchange rate which changes only during a crisis, such as a devaluation crisis, and aside
from which remains permanent for a period of time. Admittedly, this volatility of the exchange rate
is a concern. But I will remind you that when the exchange rate was permanent, our interest
rates were very volatile, as were other prerequisites to business. Therefore, it will take some time
for the economy to adjust to some volatility. This is number two.
Third. Volatility receded drastically following the introduction of the floating exchange rate. It was
very high according to various measures: both realised volatility and implied volatility, monthly
and three-monthly. It is now down to levels seen in other emerging markets, possibly even lower.
Moreover, it is substantially lower than oil volatility. It was assumed previously that as long as oil
is overly volatile, the ruble remains equally as volatile. Yet the volatility of the ruble is lower than
that of oil.
It will take a further diversification of the economy to enable basic conditions for bringing down
volatility. The current developments call for further promotion of forex hedging instruments. We
see demand emerging for these instruments, which is why we welcome the initiative of the
Government's Ministry for the Economy for the establishment of a dedicated facility to support
businesses in hedging forex risks.
QUESTION from TASS Agency:
Another question about the ruble and oil, if I may. The Brent crude price has dropped by almost
13% since the start of the year. The ruble has appreciated against the US dollar by roughly 7% in
the same period of time. Does the Central Bank monitor the ruble's dependence on oil? Can you
estimate how long this weakening of the ruble's dependence on oil will last? Thank you.
ELVIRA NABIULLINA:
Your question clearly demonstrates that the ruble is not only affected by oil. The oil elasticity of
the exchange rate depends on seasonal factors, among others. On some occasions we have
registered the elasticity ratio at 0.9, it has even reached 1 during short periods. According to our
estimates, it now stands at 0.2-0.3. You will see that the movement may even be reversely
directed if other, more serious, factors affecting the exchange rate are in place. The exchange
rate is governed not only by oil - oil is an important factor, but not the only one to influence the
exchange rate.
The depreciation of the ruble was also largely triggered by typical seasonal variation in the
current account - the current account usually shows stronger performance in the first quarter,
irrespective of oil prices. The second factor is the growth in oil prices and oil sales by exporters.
The third factor is important but the Central Bank believes that it should not be overestimated or
exaggerated. I am referring to certain inflows of capital, which are comparable to the inflows of
foreign capital to emerging markets.
Further developments will depend on many factors: oil price movements, the Fed's policy,
strengthening or weakening of the exchange rate, and the strength of our economy. There are
many forces at play here.
QUESTION from TV channel Russia-24:
Mrs Nabiullina, you have already mentioned that the Central Bank will support Russian
stateowned banks affected by sanctions in relation to the situation in Ukraine. What specific
measures are you going to take? Thank you.
ELVIRA NABIULLINA:
I would like to repeat and emphasise that we do not see any risk to financial stability of our credit
institutions even if their investments in Ukrainian assets depreciate completely, because they
account for only a very small share of their assets. Therefore we do not see any systemic risks
here. Our banks have already created or are creating provisions for such assets. Nevertheless,
given the contingencies, we decided that for their convenience they will be allowed a three-year
deferral in the creation of provisions on Ukrainian assets.
RIA Novosti's QUESTION:
I wanted to ask, you said that the Central Bank was developing an action plan to reduce inflation
volatility through non-monetary measures, among others. What kind of instruments have you
already developed? This is the first question.
And question two. Have you revised your risk and optimistic scenarios for the next three-years?
Thank you.
ELVIRA NABIULLINA:
Inflation volatility may in