“The course has deviated”: how the government comment on the strengthening of the ruble

Photo: Anatoly Zhdanov / Kommersant

Over the past year the ruble has appreciated significantly: the official dollar rate fell by 16.3%, the Euro by 20%. Representatives of the financial-economic bloc of the government and the Central Bank has repeatedly called the Russian currency is too strong and overvalued, their main applications recent months — a review of RBC

28 December 2016, Finance Minister Anton Siluanov

“If we spend all oil and gas revenues on the additional costs this will lead to the strengthening of the ruble. Is it good or not? For our industry, which is already used to the rate of 60 rubles. for dollars., further strengthening will lead to loss of competitiveness. Additional exchange rate fluctuations, even the strengthening of the ruble, now useless. Pursuing a responsible budget policy, additional oil and gas revenues would be better in a larger volume to preserve and keep in reserves.

[The ruble in 2017] will depend on the dynamics of changes in interest rates by the fed, but major fluctuations of our currency not to be expected because we are in the current forecasts do not expect any sharp changes in rates by the fed. Indeed, there are predictions that a few times decisions will be made about the rate increase, but I don’t see any serious consequences for the ruble exchange rate. The balance of payments we have a strong, in subsequent years reduce the budget imbalance, so any serious consequences for the exchange ratios no.”

28 December 2016, the head of the Central Bank Elvira Nabiullina

“Very importantly, the ruble became less volatile relative to the price of oil: we see oil prices quite much changed, and the ruble is more or less stable. This is due to the fact that economic agents get used to a floating exchange rate, begin to be hedged to build its policy of liquidity management accordingly. And we see that the ruble finds a market balance the market balance between the interests of exporters and importers and behaves far more or less worthy”.

Igor Shuvalov

Photo: Oleg Yakovlev / RBC

19 January 2017, first Deputy Prime Minister Igor Shuvalov

“At the current oil prices and given the decision netrate additional oil and gas revenues, we can confidently talk about the possibility of the currency purchase on the market. The volatility of the ruble is bad for the Russian exporters, which the government considers it important to provide greater predictability of the ruble, its lower exposure to unpredictable changes in oil prices.

17 February 2017, Minister of economic development Maxim …

“What we see last month, is a certain strengthening of the ruble. Evaluation here all the same — we believe that the strengthening that we see in the market is short-term and not related to fundamental factors. There are two factors that play a key role here: capital inflows, including those associated with the privatization transactions, and seasonality. Traditionally the first quarter is a strong quarter from the standpoint of the balance of payments. Import at the beginning of the year is always a little. These factors are now in the strengthening of the ruble. The government continues to monitor closely the situation and, if necessary, will be in this situation to react.”

17 February 2017, first Deputy Prime Minister Igor Shuvalov

“[The government] there are all sorts of opportunities [to act in case excessive strengthening of the ruble]”.

17 February 2017, first Deputy Chairman of the Central Bank Ksenia Yudaeva

“Capital inflows from investors seeking additional yield due to high interest rates, cannot be considered a major factor in the strengthening of the ruble. Among other factors — the possible increase of sales of exporters and the return of seasonality. Central Bank sees no risks to financial stability associated with the dynamics of the course. If the deviation rate from the estimated fundamental values are, it is in the normal range. We will respond to inflation, looking at inflation trends, and build policy on that basis. The exchange rate in Russia’s floating, this policy has proven effective, and we believe this”.

Maxim Oreshkin

Photo: Ilya Pitalev / RIA Novosti

March 14, 2017, Minister of economic development Maxim …

“Inflation is now below our expectations for a number of reasons, including the fact that the exchange rate [the dollar and the Euro] is below our expectations. The ruble has deviated from fundamental values, this deviation is maintained.”

20 March 2017, Finance Minister Anton Siluanov

“I think he (the ruble. — RBC) periorale from fundamental values somewhere 10-12%. We have already bought $500 million [for execution of current obligations on external debt, current conditions are very favorable for such operations] and now we see that the rate of the ruble again strengthened, and because we understand that the fundamental values of the rate deviated by 10-12%, now it makes sense to buy foreign currency to meet their current liabilities. We still have the need to carry out our obligations on the debt, on foreign currency liabilities. There is also the opportunity to purchase not less than $1 billion But not the fact that we’re gonna use it”.

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