GORKI, June 2 (Itar-Tass) —— The Russian Central Bank will stick to the effective floating currency band policy, Central Bank Chairman Sergei Ignatyev said.
The currency band ranges from 32.15 to 38.15 roubles to a bi-currency basket.
Ignatyev said that the rouble might continue to fall further if oil prices keep going down, but not as fast as it has over the past several weeks.
“If the price if oil stops falling, the rouble will most likely strengthen. If the price of oil continues to fall, the rouble will grow weaker, even though not necessarily, but slower than before because we will use currency interventions much more actively,” Ignatyev said
The bank is already responding to the situation. “The bi-currency basket has come closer to the ceiling, i.e., it has come into the area where we actively use currency interventions. We tried 200 million U.S. dollars yesterday, and the situation is generally under control,” he said.
He believes that the main reason for the rapid fall of the rouble is the deterioration of the economic crisis in Europe, a resulting drop in prices for resources, including, oil, and expectations of negative trends in Russia’s balance of payments.