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Ruble may weaken July-Decemeber over Ukrainian crisis — Central Bank

MOSCOW, June 19. /ITAR-TASS/. The months-long political crisis in Ukraine may trigger a further deterioration of the business climate and weakening of the Russian ruble in July-December, the Central Bank of Russia (CBR) said in a statement Wednesday.

“In case the Ukrainian crisis does not subside in the nearestv future, the Russian economy may see both direct and indirect negative consequences,” the authority said.

The possibility of trade collapse between the two countries, increasing risks for gas transit to Europe and possible sanctions extension by Brussels and Washington may scare off domestic and foreign investors from Russian assets, the CBR said.

In case the risks materialize, the Central Bank will employ anti-inflation policies, it said.

In May, the ruble exchange rate fall contributed 0.8% to the annual consumer price inflation (CPI) growth, the central bank said. The CPI stood at 7.6% in May.

According to the CBR’s forecast, the CPI increase will slow down in 2015-2016 and will manage to reach the target levels of 4.5% in 2015 and 4% in 2016.

The authority separately said in its report that citizens’ deposits growth slowed down to 10.5% as of June 1 compared to 18.1% as of the end of 2013.

The CBR attributes the decline in deposits’ rise to people’s fears that the central bank continues its harsh policies against banks involved in shady deals, and fears that authorities will limit dollar-denominated deposits. Russians have preferred to buy large batches of durable goods lately, waiting growing inflation, the central bank said.