The Central Bank of Russia yesterday strengthened the ruble in the two-currency basket (€0.45+$0.55), raising it 9.3 kopecks, or 0.3 percent, to 29.43 rubles.
Photo: Ivan Grankin
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Central Bank Strengthens Ruble More
The Central Bank of Russia yesterday unexpectedly strengthened the ruble in the two-currency basket (€0.45+$0.55), raising it 9.3 kopecks, or 0.3 percent, to 29.43 rubles. Although the nominal exchange rate of the ruble has risen only 0.6 percent this year, the real exchange rate has gone up 2.9 percent. The Ministry of Economic Development forecasts a real rise of 3.3 percent for the year. Economists expect it to rise still more but, instead of harming the country’s competitiveness, it will help it by making necessary equipment purchases and industrial modernization easier.
It is possible that the Central Bank was spurred on by the inflation statistics published yesterday showing inflation for the last week at 0.2 percent. Inflation has already reached 9 percent for the year. The Bank announced the beginning of interventions on the currency market in the middle of May, then it announced that it was giving the ruble a wider corridor of fluctuation – without stating its exact parameters. Therefore, it is not clear whether the ruble has actually strengthened or the market has become more volatile. The last noticeable strengthening of the ruble was on June 10. The unpredictability of the exchange rate is expected to force foreign speculators off the market and reduce the money mass (and inflation with it).
Russian producers of vehicles and heavy equipment do not experience strong competition from abroad. Rosstat, the state statistics service, indicates that equipment production rose by 20 percent in April of this year and 13 percent in May. The Russian government allows the duty-free importation of equipment that has no analogs among Russian products.
www.kommersant.com
All the Article in Russian as of July 10, 2008
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