"Core inflation stood at 3.9%. This is 0.4% better than last year," Alexei Ulyukayev said.
Ulyukayev said this level of inflation was comparable with consumer price growth in the industrialized economies.
"Although the growth of the country's gold and foreign exchange reserves was twice as fast as in the first half of 2006 than a year earlier (they grew $56 billion, excluding exchange rate differences) and the monetary base rose 35% and money supply 43%, inflation decreased due to the economy's de-dollarization," Ulyukayev said.
Ulyukayev said the dollar was losing ground in Russia as an instrument of payment and saving.
The CBR first deputy chairman also said the Central Bank could consider reducing the refinancing rate if inflation complied with the government's forecast.
"If we keep inflation within the target range, there is no reason to maintain the refinancing rate above 10-11%," Ulyukayev said, adding that the Central Bank was prepared to reduce the cost of borrowings on the domestic market in several months' time.
The Central Bank cut the refinancing rate from 13% to 12% late last year and to 11.5% from June 26 this year.
Ulyukayev also said the real effective rate of the ruble's appreciation would not exceed 9% this year.
