Transcript of the beginning of the meeting:

Vladimir Putin: Mr Ignatyev, what is your assessment of current developments?

Sergei Ignatyev: I consider the macro-economic environment generally normal. Inflation has been falling in recent years, although not as fast as we would like it to. I think, this pattern will persist.

The main reason is that we have significantly decreased monetary expansion.

In addition, a fairly favourable environment is shaping up for disinflation in the Russian grain market. This year the harvest is very good, and grain prices are low, as well as prices for other agricultural products. Global oil prices are also decreasing, which favours disinflation in Russia.

Vladimir Putin: And there's a lower petrodollar inflow.

Sergei Ignatyev: Exactly. Falling oil prices cause the gold and currency reserves to grow slower, we emit less roubles and the monetary expansion slows down.

This is also contributed to by oil prices, as the price in the Russian market is determined by prices abroad, and a decrease in fuel and lubricant prices abroad causes a decrease in Russian prices for fuel and lubricants.

As for the developments in the financial and currency markets, in August there was a capital outflow of around $5 billion. That's not too much, as we have had higher outflows. This January we had over $10 billion, in August 2007 there also was a big capital drain. I don't think the outflow affected macroeconomic developments very strongly. It did affect the rouble exchange rate to some extent. In May, we announced our plan to gradually decrease the role of the Central Bank's currency market intervention and to increase the rouble exchange rate volatility. The Central Bank's role in predetermining currency exchange rates will decrease, and market factors will have more influence. We have included this in the draft project for general monetary management policy for the near term, submitted to the State Duma and the Government.

This caused the currency exchange rates to become more volatile. Recent days have seen some weakness in the rouble compared to the US dollar.

Vladimir Putin: How does this affect the production sector?

Sergei Ignatyev: In terms of global competition it is not bad for the Russian market. In terms of inflation it is not too good. Definitely, stability of Russian currency is an advantage, although strict control is not the best option, as we will have to switch to a different mode sooner or later.

Vladimir Putin: Mr Ignatyev, you said the recent outflow was not large. What is the Central Bank's forecast for the end of this year?

Sergei Ignatyev: According to our initial estimates, we have had a net capital inflow of $25 billion within the last eight months. We predict that this year's net capital inflow will total around $40 billion.

Vladimir Putin: This means, by the end of this year we will still have significant inflow?

Sergei Ignatyev: Yes, we are sure of that.