MOSCOW Jan 31 The chairman of Russia's central
bank told President Vladimir Putin on Thursday he expected
interest rates to fall in line with inflation in the coming
years, rebuffing political pressure to ease policy now to boost
The comments by Sergei Ignatyev followed Putin's earlier
remark that a rise in interest rates to levels well above
inflation would hit the flow of credit to the economy.
Ignatyev, who retires in June after 11 years at the helm of
the Bank of Russia, said that if the government upholds fiscal
discipline it would be possible to reduce inflation to 4 percent
or less in the next few years, from over 6 percent now.
"At the same time, interest rates will fall, perhaps not
straight away, perhaps with a delay. But, as inflation falls,
interest rates will fall," Ignatyev said in broadcast remarks at
a cabinet strategy meeting chaired by Putin in the Kremlin.