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    Russia's Central Bank expects to keep inflation at 9% in 2006

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    MOSCOW, September 13 (RIA Novosti) - The Central Bank of Russia expects to keep inflation within 9% in 2006, the first deputy chairman said Wednesday.

    The Russian government earlier adjusted its 2006 inflation target from 8.5% to 9%.

    "We have a chance to hit the [2006] inflation target of 9%, which we drafted with the government," Alexei Ulyukayev told an annual conference sponsored by UBS.

    The CBR forecasts inflation at 8.5% this year, but Ulyukayev said the bank could make minor upward adjustments to its 8.5% inflation forecast for 2006 in October.

    "Quite possibly, the inflation forecast could be revised slightly in October. We could raise it to 9% or to a different figure," Ulyukayev said.

    A forecast for the country's social and economic development until 2009 prepared by the Economic Development and Trade Ministry projects inflation at 6.5%-8% in 2007, 4.5-6% in 2008 and 4-5.5% in 2009.

    Ulyukayev said the forecast on the growth of the ruble real effective rate in 2006 would also be fulfilled.

    "We will definitely comply with the forecast on the appreciation of the ruble real effective rate by 9%," Ulyukayev said.

    Ulyukayev said inflation was slowing year on year due to the de-dollarization of the Russian economy, which already stood at $5 billion in 2006.

    "These funds have been converted into rubles" Ulyukayev said.

    Many Russians are accustomed to keeping their savings in dollars, often at home, rather than in ruble-denominated bank accounts and major payments, such as apartment rents, are also frequently made in the U.S. currency.

    The CBR first deputy chairman said lower inflation was also attributable to the government's policy to control the charges of infrastructure monopolies and the Central Bank's monetary measures.

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