If there were no budget rule, the exchange rate could be 50 rubles per dollar, Russia's Finance Minister Anton Siluanov said.
Siluanov said that the budget rule, under which energy revenues from oil sold at over $40 per barrel are used to buy foreign currency on the domestic market, makes the ruble more predictable.
"If there were no budget rule, the exchange rate could be about 50 rubles per dollar," the minister stressed. "Of course, the ruble would be stronger but we would also have an opposite movement if oil deflated. Such volatility and unpredictability may hurt entrepreneurs," Prime agency cited him as saying.
"The main task is not so much to form reserves, which is also important, as to ensure predictability for business in what relates to the exchange rate," Siluanov said.
The minister also said that compulsory health insurance payments to unemployed people amounting to around 500 billion rubles annually may be transferred to the federal budget.
The professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, speaking with Vestnik Kavkaza, noted that the budget rule protects from an overabundance of dollars and a shortage of rubles in the domestic market. "If there was no budgetary rule, the National Welfare Fund would not receive additional revenues if oil prices soared - that is, the currency would go to the country, but the number of rubles would remain stable. It would lead to the strengthening of the ruble. Now it does not happen because with the Ministry of Finance uses a part of rubles in order to buy this excess amount of dollars for the National Welfare Fund," he explained.
At the same time, Alexander Abramov drew attention to the fact that the strengthened ruble is not that bad for the Russian economy. "It would lead to greater volatility of the ruble, which would prevent exporting metallurgists from selling their products abroad, but on the whole, a stronger ruble is often profitable for business. If the dollar exchange rate was 50 rubles, it would be easier for business to buy equipment abroad. Speaking about a downside of expensive rubles, the Ministry of Finance has only its own interests in mind, as it wants to replenish the Reserve Fund," the professor at the department of the stock market and investments at the Higher School of Economics stressed.
Chairman of the State Duma's Financial Market Committee, Anatoly Aksakov, in turn, said that having a stable ruble is very important. "Those who consider the strengthening of the ruble positive for the economy are deeply mistaken. The strengthening ruble reduces the competitiveness of Russian goods with imports. Once, the growth of the exchange rate to 23 rubles per dollar led to the fact that entire production in our country was closed. Now, due to the weakening of the ruble, many shops and manufactures opened and began to supply their products not only to the domestic market, but also to foreign markets," he explained.
"The budget rule has really worked for the non-strengthening of the ruble, since any oil price higher than $40 per barrel gives additional petrodollars, which by law must be purchased on the market and placed in various foreign securities. In order to purchase these additional petrodollars, they run the printing press, hence the lack of growth in the ruble," Anatoly Aksakov concluded.
