By Vestnik Kavkaza
Russia will gradually move to a floating exchange rate, using international reserves to maintain its balance, President Vladimir Putin said yesterday at a meeting of the discussion club "Valdai". "We will monitor our foreign exchange reserves and the national currency's rate. We will gradually move to a floating rate, we will not spend our reserves thoughtlessly, we'll use them for a specific balancing," Putin is quoted as saying by Interfax. According to the president, the international reserves slightly decreased and now constitute around 450 billion dollars. This was caused by the fact that the Central Bank uses these funds to influence the exchange rate, "but this policy cannot be endless."
Meanwhile, in an interview with Vestnik Kavkaza chief expert of the "MosFinAgentstvo" Dmitry Miroshnichenko recalled a famous saying that "forecasting exchange rates is different from guesswork only in one way - guesswork is much more accurate." According to Miroshnichenko, "in the short term it is quite senseless. But as a long-term forecast, if no major improvements in the Russian economy take place, it is difficult to expect the ruble to strengthen, as the observed decrease this year is largely a reflection of the weakness of the Russian economy and its transition to stagnation on the brink of recession. Unless there is a significant improvement next year, I believe the potential devaluation will be in the range of 10%. The ruble can lose about 7-10% of its current value. This is a very real and quite likely scenario."
According to the expert, amid falling oil prices and a rising dollar the question of the development of business in Russia is very topical. "Financial experts underline the importance of establishing a favorable business climate in the country. The removal of administrative barriers for some regions established at the federal level can contribute to the creation of such a climate. I know examples of mass improvement of the conditions for doing business. Russian legislation is more unitary than federal, despite the fact that our country is officially a federation. The primacy of national law does not provide any freedom of action to certain regions. Of course, here you can look for some historical reasons for this, but the fact remains that a significant improvement in some regions without a significant improvement in the overall situation in the country, reducing the administrative, regulatory, tax pressure on business, will be very difficult to achieve. Therefore, the problem is in Moscow rather than in the regions," he said.
