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Bank of Russia doubts if weaker ruble may help Russian economy

June 20, 2013, 11:55 UTC+3

Deputy chairman Alexei Ulyukaev thinks Russia should steer clear of making the ruble too strong to achieve economic growth

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Alexei Ulyukaev, ITAR-TASS

Alexei Ulyukaev, ITAR-TASS

ST. PETERSBURG, June 20 (Itar-Tass) - The Bank of Russia believes that a weaker ruble will be of no help to the Russian economy, the bank’s deputy chairman Alexei Ulyukaev told the media on Thursday.

Earlier, Economic Development Minister Andrei Belousov said that the ruble’s firming was fraught with certain risks to the Russian economy.

“Calculations indicate that the ruble’s firming caused considerable adjustments to the growth of our economy’s costs as compared with those of 2007,” he said, adding that it was just one of the many factors. Of greater importance in his opinion are growing tariffs of natural monopolies and wage rises, which exceeded labor productivity growth.

“Gas and electricity prices and real wages have been up 1.5-2 times (in contrast to 2007). The ruble’s firming contributed to this,” Belouslov said.

To achieve economic growth Russia should steer clear of making the ruble too strong.

“Smooth weakening of the ruble would be a blessing for the Russian economy, because it would make Russian goods more competitive,” Belousov said.

Presidential press-secretary Dmitry Peskov has said that it would be wrong to interpret the ongoing trends as a resolute devaluation of the ruble.

“Ruble fluctuations may take place, of course, because the world economy is volatile and the Russian economy is volatile, too, to a certain extent,” he said. “There are plain economic laws - a weakening of the local currency boosts the operation of export-oriented industries, which are in the majority in Russia,” Peskov said.

“It would be very wrong to speculate about some surges, about some resolute devaluation,” he added.

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