He promised Russians it would remain stable
The rouble will not fall - a promise made yesterday by the Russian Prime Minister at a meeting with members of the public. He said that even a temporary fall in oil prices could not threaten the rouble. Experts say that the Central Bank has no grounds to devalue the rouble at present, although they note that Mr Putin's words should be taken only as a short-term forecast. There are currently no preconditions for a fall of the rouble. In fact, the rouble could strengthen. That is what Prime Minister Putin said when he met with members of the public in a job centre in Podolsk.
He said that the Government would be able to maintain the currency relationship even in the case of a falling oil price. The Prime Minister pointed out that Russia gets most foreign currency through its export trade. "The inflow of foreign currency due to export is equal to the outflow of money that we use to buy imports," Mr Putin explained. He noted that the situation's stability can be relied on, so long as there is no long-term tragic change in external markets, not a one off change, but a long-term one. The Prime Minister also mentioned to the Central Bank, which, as he noted, is certain that in the near future there will be no planned changes.
In fact, First Deputy Chairman of the Central Bank Aleksei Ulyukayev said in an interview to Reuters yesterday that the macroeconomic situation affecting the currency exchange is stabilising. In the second half of the year, he said, a possible rise in the price of oil will stabilise the strengthening of the rouble.
Experts treat the speculation about a possible strengthening of the rouble with caution, but think that Prime Minister Putin's announcement reflects the current situation. "The balance of payments is clearly normalising. We have wed with new limits," said Anton Struchenevsky, an economist at Troika Dialog. He thinks that the rouble can stay stable for a half year to a year. However a great deal depends on how the Government tackles inflation, which creates prerequisites for a furtherdeflation of the rouble. Evgeny Nadorshin, an expert with the Trust Investment Bank, said that if there was a sudden fall in the price of oil which could prompt a new wave of panic it would be considerably smaller. The analyst said, "There won't be that amount of free roubles to enable the purchase of dollars in the same quantities as in autumn and the beginning of winter, but Central Bank reserves are twice what was spent." He also thinks that the stability of the rouble can be counted on through the next three months, at a minimum.
Marina Selina