"Our March inflation forecast is 0.7%," Alexei Ulyukayev said.
In February, inflation in Russia stood at 1.1%.
Last year's inflation aggregated 9%, down from 10.9% in 2005, according to the national statistics service.
A forecast for the country's social and economic development until 2009, prepared by the Finance Ministry, projects inflation at 6.5%-8% in 2007, 4.5-6% in 2008, and 4-5.5% in 2009.
However, late last year the economics ministry gave higher consumer price growth projections of 7% for 2008, and 6.8% for 2009. According to the ministry, inflation will slow to 6.5% in 2010.
Ulyukayev also said the Central Bank will buy $70-80 billion worth of currency in 2007, $40-50 billion less than last year.
"This year, the Central Bank will buy $40-50 billion less currency than in 2006, when we bought $118 billion. This year we will buy $70-80 billion," he said.
Ulyukayev said the bank has raised its net capital inflow forecast for 2007 to $30 billion.
"We have raised Russia's net capital inflow forecast twice this year," he said. "This time our estimate for 2007 is $30 billion."
According to the Finance Ministry, in 2006 net inflow of private capital was $41.6 billion.
Ulyukayev said the refinancing rate, which went down January 29 by 0.5 percentage point to 10.5%, could be lowered again in the first half of 2007.
"I don't rule out such a possibility in principle," he said.
The first deputy bank chairman also said the aggregate volume of initial public offerings (IPO) in the energy and banking sectors on this year's results could exceed the IPO volumes of all other businesses.
