What helps to strengthen the ruble?

What helps to strengthen the ruble?

The strengthening of the ruble requires ‘fine tunings’ in relation to the export-oriented industries, the spokesman for the Russian president Vladimir Putin, Dmitry Peskov, said, commenting on the words of the President, said at the meeting dedicated tothe need to think about further steps in connection with the strengthening of the ruble. At the same time the press secretary of the head of the state pointed out to the need to balance support for various sectors of the economy.

Recall, that yesterday at a meeting with Prime Minister Dmitry Medvedev in Sochi  Vladimir Putin noted the strengthening of the national currency, despite the volatility in the commodity markets, and offered to discuss the future actions, taking into account these factors.

In an interview to Vestnik Kavkaza the head of the Association of Regional Banks, the chairman of the Duma Committee on Economic Policy, Innovative Development and Entrepreneurship, Anatoly Aksakov, said that the strengthening of the ruble has been caused not by a drop in the oil prices, but by the co-rotational movement. This suggests that there are other sources of the exchange earnings. "Here it is necessary to take into account any payment of taxes in ruble terms, the large ruble payments for some obligations. It is quite possible that the increased demand for the ruble by the economic entities caused just by these reasons,’’ the deputy said.

However, he drew attention to the fact that it is necessary for the government to acquire foreign currency for  the economic development in terms of relative strengthening of the ruble. ‘’The acquiring  of foreign exchange reserves contributes to the emission of money, thereby the deterring and appreciation of the ruble will occur. With regard to the system of measures, it is necessary to invest in the state, public-private and private companies. In addition, the Industrial Development Fund should be more capitalized, and the project  financing of the Central Bank should be extended. Also the Corporation for the Development of Small and Medium-Sized Businesses should be involved. And VEB should work actively in this direction,’’  Anatoly Aksakov concluded.

In turn, the associate professor of the department of Finance, Money Circulation and Credit of RANHiGS, Maxim Safonov, said that the summer  is the second quarter of the year, which, in fact, is already ending. ‘’The statistics for the second quarter does not work, because there is no transaction, no traffic. And all the predictions that are made in the summer, are more political than economic in nature. There are now instructions to strengthen the ruble, the government will need to develop flexible strategy to strengthen it,’’ he said.

Talking about how such strengthening of the ruble is a positive or negative event for the Russian economy, the expert said that it all depends on how much the ruble strengthened. "If it reaches the level of 30-40 rubles to the dollar, it is a positive thing,"  the expert said, explaining that the excessive strengthening of the ruble is a negative factor.

According to him, it is still too early to talk about the serious findings  in the present circumstances of the relative strengthening of the ruble. "The principal conclusion is made based on the results of the previous year in February and March or in September and October, when it is clear what we have, and what financial goals set for us,’’ Maxim Safonov summed up.