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Russian currency may reach 61 rubles vs dollar in 2015 with current oil prices — Kudrin

December 22, 2014, 16:21 UTC+3 MOSCOW
“If oil prices stay at the current level, sanctions are not tightened and the government takes sound measures, the ruble exchange rate will even strengthen in the first quarter of 2015,” Kudrin said
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© Denis Vyshinsky/TASS

MOSCOW, December 22. /TASS/. The Russian currency may reach 60-61 rubles to the dollar by late 2015, if the world oil prices stay at their current level and the West does not tighten its sanctions against Russia, former Finance Minister Alexey Kudrin said on Monday.

“If oil prices stay at the current level, the sanctions are not tightened and the government takes sound measures, the ruble exchange rate will even strengthen in the first quarter of 2015,” Kudrin said.

World oil prices are currently hovering at slightly over $60 per barrel. “By the end of the year (2015), it may reach its current value of about 60-61 rubles to the dollar,” he said.

The ex-finance minister said, however, the ruble exchange rate might also be affected by other factors. The oil price fall accounts for just 25% of the ruble slump, Kudrin said. Western sanctions contributed from 25 to 40% to the ruble’s plunge, he said. “That is, the share of the sanctions is no less than the impact of low oil prices,” Kudrin said.

The Central Bank's too mild monetary policy has been another factor affecting the ruble, he said. This policy increased ruble supply on the market, the ex-finance minister said. Russian banks have used increased ruble supply on the domestic market lately to buy foreign currency amid little confidence in the national currency, thus pushing the ruble further down.

The ex-finance minister also said that oil major Rosneft’s non-transparent deal last week also “frightened the domestic foreign exchange market and caused negative consequences.”

Rosneft reportedly floated a 625 billion ruble ($11 billion) bond last week to buy foreign currency for foreign debt repayments, thus affecting the ruble exchange rate.

Currently, the ruble exchange rate is under control and some stabilization is expected already in the first quarter of 2015, Kudrin said.

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