"Vestnik Kavkaza"
Russia will not choose the path of deterioration of macroeconomic indicators and an increase in the budget deficit, President Vladimir Putin said in Milan commenting on the weakening of the ruble and lowering of world oil prices.
"Russia has one of the world's largest gold reserves," Putin said. "The Bank of Russia, on the one hand, will conduct a well-balanced financial policy: use the floating exchange rate and not mindlessly waste all its reserves, which are enough and amount to more than 400 billion of dollars."
The head of the finance, monetary circulation and credit department at the Russian Presidential Academy of National Economy and Public Administration, Alexander Khandruev, believes that the Central Bank has to act especially carefully in the process of stabilizing the exchange rate. "The objective of the Central Bank is to prevent unnecessary critical market fluctuations on the exchange market, as it gives rise to illicit dealers. From this perspective, all market participants are interested in a predictable policy of the Bank of Russia in relation to the exchange rate. If you choose an exchange rate and declare that you will not arbitrarily intervene in the domain of the exchange rate, it is necessary that the market believes you. In the end, it is not the state and not the Central Bank that determine the exchange rate, but market forces. The Central Bank should not carry out foreign exchange intervention. We must not be generous with banks, especially not with large banks."
The director of the Institute of Economic Forecasting, Victor Ivanter, sees no reason to panic in connection with the depreciation of the ruble. "A way to stabilize the ruble is to stabilize the economy. Our economy is not in crisis, it has just slowed down its growth. With regard to foreign exchange reserves, we have two times more than necessary for normal functioning of the economy, based on our estimates."
At the same time, Ivanter has a negative view of the budget situation: "In the past 9 months we had a 100 billion surplus. What is the problem? There are things that do not happen on their own, it is necessary to control economic growth and the movement of money. We came up with the following control method: we get oil revenues, but we don't put it towards the domestic economy because a Russian will steal anything he is given.
We used to keep substantial reserves accumulated with the help of the oil and gas sector in foreign banks and buy American stocks in dollars and euros. Now we have the opportunity to use these funds to directly finance the economy. We would have a much higher income in this case. Business is quiet and waiting for some stabilization. It seems to me that the main objective of the Central Bank is to stop telling stories about how things are going to be but to create a clear situation."
A leading expert of the Development Center at the Higher School of Economics, Dmitry Miroshnichenko, said that the Central Bank should not spend its money on interventions in order to maintain the ruble, because it leads to a meaningless waste of gold reserves. A floating exchange rate, in his opinion, will bring the balance of payments to a normal level, even though the population will become poorer. "The simplest and at the same time the best indicator is the import cover of foreign exchange reserves. This indicator is known to all analysts, illicit dealers, and they know that it is important for everyone. The situation is considered good when the reserves of available means to keep the rate of national currency exceeds the six-month volume of imports of goods and services. There is a bottom bracket as well. If we reach it, we find ourselves under attack from the world's illicit dealers. I am talking about 3 months. If the reserves do not cover three months of imports of goods and services, be prepared for a large-scale attack on the national currency. No one will be able to resist it." Miroshnichenko said that if the Central Bank wants to have some room to manoeuvre, it must avoid creating panic on the market.
