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Russia to lose 160 bln USD a year on oil price slump, central bank says

Xinhua, February 4, 2015 Adjust font size:

Russia would lose about 160 billion U.S. dollars in oil exports in a year if oil prices were at 45 dollars a barrel, Central Bank chief Elvira Nabiullina said Tuesday.

"The drop in oil prices from 100 to 45 U.S. dollars a barrel, in our estimation, leads to a decrease in oil exports revenues by roughly 160 billion U.S. dollars per year," Nabiullina told reporters.

"It is a rather large sum. Considering that Russia's overall exports amount to about 500 billion U.S. dollars, you can imagine the impact of dropping oil prices on the balance of payments and Russia's economy," RIA Novosti news agency quoted Nabiullina as saying.

Meanwhile, the bank chief said that several economic indicators showed that the inflation rate started falling in January.

"Inflation will reach its peak in the first quarter and will remain high during the first six months of 2015, with a further decline," Nabiullina said.

Deputy Economy Minister Alexei Vedev has said earlier that inflation reached 11.4 percent in 2014 and could soar to 17 percent within months.

The cental bank said at the end of last month that annual inflation in January 2015 has amounted to 13.1 percent.

Nevertheless, Prime Minister Dmitry Medvedev promised that the government would monitor the price hike in consumer markets.

Rather than introduce state price regulations, the government should better monitor the current trends, Medvedev said. "As soon as the state begins interfering (by regulations) ... (the action) will be accompanied by further hyperinflation and rising prices."

Russia's ailing economy has suffered due to mounting pressure from Western sanctions and global plummet of oil prices. In order to deal with current unfavorable economic conditions, the Russian government last week published a 38-page anti-crisis austerity plan.

President Vladimir Putin pointed out Tuesday that there were possibilities to resort to additional resources for a full implementation of the anti-crisis plan, considering that Russia was going through difficult times.

It was crucial to support Russia's industrial and agricultural sectors, the national banking system, labor market, as well as small and medium-sized businesses, Putin said. Endite