Experts expect no financial crisis in Russia

A round-table conference has been organized in Russia to discuss the financial developments in the country. The talks were attended by Alexey Vedev, Director of the Center for Structure Research of the Institute of Economic Policy named after E.T. Gaydar, Yevsey Gurvich, Head of the Economic Expert Group, and Alexander Morozov, chief economic analyst of HSBC for Russia and the CIS.

Vedev denied the strength of ruble in 2010-2011. He believes that its weakness today is a result of external factors. Currency sales were 3 to 4 times less active in January than throughout 2013. The expert approved the strategic moves of the Central Bank. He urged the Central Bank to interfere, noting that the euro cannot cost 48 rubles, and dollar 35 rubles.

Gurvich linked the dropping price for rubles with closing of the US QE program. He said that the US had reduced its support of developing countries. The expert reminded that devaluation was common for all BRICS states, for example, in Indonesia and Argentina. He denied rumours about purposeful devaluation of the ruble. Overall, these events were the price the country had to pay for becoming a market economy, according to Gurvich. He sees no signs of crisis.

Morozov agreed that there was no crisis. The ruble price dropped by 10%. He pointed out that high inflation and slowing economic development weakened the currency. Morozov added that imports were growing, the balance of foreign trade was dropping and the capital was outflowing. The expert admitted that the only surprise was the reduction of the currency price in January, not February-March.