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Economic Development Ministry sees no preconditions for ruble collapse

February 21, 2014, 12:25 UTC+3 BELOKURIKHA
Russia’s inflation rate will not go beyond 5.5%, he said
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Deputy Economic Development Minister Andrei Klepach

Deputy Economic Development Minister Andrei Klepach

© ITAR-TASS/Vyacheslav Prokofyev

BELOKURIKHA, February 21. /ITAR-TASS/. There are no preconditions for the collapse of Russia’s national currency, but its exchange rate will show a moderate decline, Deputy Economic Development Minister Andrei Klepach has told a grain conference in the Altai Territory, Russia’s Siberia.

“This year’s basic forecast for a decline in the ruble’s exchange rate in real terms was approximately 1.5%. In 2015-2016, it will show a more moderate decline,” he said on Friday, adding that this decline was caused by a reduction of trade operations and higher outflow of capital.

The forecast says in the first quarter of 2014 the capital outflow would reach $35 billion, while the current external balance — $20 billion, the deputy minister said.

“In these conditions of imbalance the ruble will go weaker,” Klepach said, recalling that in January the reduction in the ruble’s nominal exchange rate totaled almost 6%.

He added that the ruble’s exchange rate dynamics had not differed from that of other emerging economies’ currencies.

 

Russia’s inflation rate

Russia’s inflation rate will not go beyond 5.5% in 2014, even if the ruble’s devaluation is taken into account, Andrei Klepach said.

“Now the exchange rate’s dynamics will play a significant role. The baseline forecast for this year totaled 4.8%. But if we even take into consideration effects from the ruble’s devaluation that we are now witnessing, it will unlikely go beyond the set limit prices — 5.5%,” he said on Friday.

The Economic Development Ministry has been assessing risks as moderate.

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