OREANDA-NEWS. On August 11, 2009 CBR issued a report on the country’s monetary base (as of 1 August). According to the report, the base was decreasing throughout the month of July, tumbling to RUB4,850.5bn by month’s end. On 1 July, the monetary base stood at RUB4,967.6bn., reported the press-centre of OTKRITIE FC.

In regard to structure, it is worth noting that the areas in which the decreases were largest were in bank deposits with CBR, and with the banks' correspondent account balances with the Bank of Russia. Since CBR continued to raise the mandatory reserves ratio, the required reserves rose by RUB31.4bn.

View: We consider such developments in the monetary sphere to be negative, because the economy needs additional stimulus including quantitative easing. Thus, we believe that it would be useful for the economy if CBR expands its balance sheet. We see no compelling reason to worry about inflation because in Russia this is not purely a “monetary phenomenon”.