Nabiullina: volatility of ruble dropped threefold since beginning of year

 Nabiullina: volatility of ruble dropped threefold since beginning of year

The head of the Central Bank of the Russian Federation, Elvira Nabiullina said about the gradual reduction of exchange rate volatility.

In her opinion, "the floating exchange rate regime is best suited to the current situation in the Russian economy." "The volatility has decreased significantly since the beginning of the year, according to various indicators, then the volatility factor was 60%, but now it is less than 20%," Nabiullina noted.

According to her, in the conditions of a free-floating the ruble exchange rate could be non-volatile, but only if the oil price would be stable or the Russian economy wouldn't highly dependent on it.

"When our economy is more diversified, including the exports, the course will be more stable," Interfax cited her as saying.

The chairman of the Duma Committee on Economic Policy, Innovation and Entrepreneurship Development, Anatoly Aksakov, stressed in an interview with a correspondent of Vestnik Kavkaza that the low volatility of the national currency is "always a positive factor". "Right now, the ruble is less volatile than it was at the end of last year, despite the drop in oil prices and its weakening. This shows that the population and business have begun to trust the Central Bank more than they did last year and the beginning of this year. I think that the situation is fully under control," he said.

Trust in the Central Bank, according to Aksakov, was formed by the consistent work of the regulator. "As soon as the Central Bank felt that the market was becoming unstable, it immediately stopped the decline in the key rate, because it can affect the volatility of the national currency. Secondly, its toolkit was expanded quite seriously: now it includes not only reserves and interventions on the foreign exchange market, but also a currency repo, currency auctions and the expansion of the Lombard list," the chairman of the Duma Committee on Economic Policy, Innovation and Entrepreneurship Development explained.

A professor of the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, in his turn, recalled that the reduction in volatility means lower financial risks. "Accordingly, the reduction in the risk affects consumer prices and insurance premiums. In general, it is certainly a positive factor," the expert agreed with Nabiullina and Aksakov.

"The volume of refinancing of the banking system is minimal now, and the rate is sufficiently high. The Central Bank, of course, doesn't pursue a policy of supporting the ruble with currency interventions. We can see that the amount of foreign exchange reserves decreased a bit, and I think that the use of this fund smooths out volatility at some extent, " Alexander Abramov explained.

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