UPDATE 1-Russia cenbank vows non-standard measures to offset possible new sanctions

Fri Sep 5, 2014 4:56am EDT

Related Topics

* Russian cenbank ready to act to offset sanctions

* EU may announce new measures on Friday

* Cenbank sees rouble at comfortable level vs basket (Changes dateline, adds comment, background)

By Oksana Kobzeva

SOCHI, Sept 5 (Reuters) - The Russian Central Bank said on Friday it was prepared to take "non-standard" measures to offset the impact of possible new sanctions that could be imposed on Moscow by the European Union.

The European Union is to announce on Friday whether it will impose more punitive measures against Russia for its role in the Ukraine crisis. Those measures could bar Europeans from buying Russian sovereign bonds and new debt issued by some state-controlled companies.

A possible deal on a ceasefire, also expected later on Friday, may soften the EU stance.

"We are ready for non-standard situations," First Deputy Governor Ksenia Yudayeva said on the sidelines of a banking forum in Russia's southern city of Sochi.

"We are ready to use different instruments which could be needed, including non-standard application of the tools which are commonly used for monetary policy."

When asked about what could these measures might include, Yudayeva decline to comment.

Previous waves of sanctions the continued escalation of the crisis between Moscow and the West have sent the rouble and shares down, and bond prices up.

ROUBLE COMFORTABLE

Yudayeva, who admitted that in the current geopolitical situation preserving Russia's financial stability is a key task for the Central Bank, said the situation for now is under control.

"The rouble is trading now at a comfortable level inside its trading corridor," Yudayeva told the conference. "We are not seeing any serious threats to our financial stability right now and therefore, we are not conducing any currency interventions."

The Central Bank keeps the rouble in a trading range against a dollar-euro basket and intervenes when the rouble reaches either edge of the band. The band is currently set at 35.40-44.40 roubles per basket.

At 0810 GMT, the rouble was trading at 41.84 versus the dollar-euro basket, 0.3 percent higher since Thursday's close.

But the rouble has lost around 1.5 roubles against the basket in the end of last month, when the West said Russian troops and armory were present in eastern Ukraine.

INFLATION BITES

The Central Bank will be forced, however, to revise its 2014 inflation forecast as the weakening rouble and Russian embargo on some foodstuff from the EU, Japan and some other countries, have sent consumer price inflation to 7.6 percent last month.

Yudayeva said that the bank's new forecast may mirror the Economy Ministry estimates of 7.0-7.5 percent for this year. This would be significantly higher than the bank's earlier estimates of up to 6.5 percent.

"Indeed, inflation rose because of non-monetary factors, but man of those non-monetary factors have a limited, temporary character and when they end, inflation may decline," Yudayeva said.

She reiterated that capital outflow from Russia is expected at around $100 billion this year.

(Reporting by Oksana Kobzeva; Writing by Lidia Kelly; editing by Ralph Boulton)

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