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Russia’s deputy PM believes OPEC deal will stabilize oil prices and ruble exchange rate

June 01, 15:22 UTC+3
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ST. PETERSBURG, June 1. /TASS/. Extending OPEC agreement on reducing oil production will stabilize oil prices and the ruble exchange rate, Russian Deputy Prime Minister Arkady Dvorkovich said in an interview with TASS.

"In general, this decision and our participation in the OPEC agreement is a two-component plus - oil prices are stable, and at the same time we do not create excessive pressure on the ruble exchange rate. We do not want oil prices to rise or fall sharply, depending on the short-term decisions of the producer countries," Dvorkovich said.

He noted that Russia is striving to achieve a balance of supply and demand in the oil market in the medium term. "We roughly understand the rate at which demand can grow, the production costs in key regions of the world, and how the supply can vary depending on prices," Dvorkovich added.

Ruble exchange rate 

The exchange rate of 60-65 rubles per dollar is favorable for the Russian economy, Dvorkovich forecasts.

"The situation [with the ruble’s exchange rate - TASS] will not change radically as it may fluctuate within due limits but I don’t expect any sharp changes. If oil prices keep within reasonable ranges, and they should, given the current OPEC decisions, fluctuations of $5-10 regarding both the oil price and the exchange rate are always possible, no big thing," he said.

When asked to comment the decision to extend the oil production cut agreement made by OPEC and non-OPEC nations, Dvorkovich said that Russia welcomes moderate decisions that support prices at a certain level and cause no market unbalance. "The main thing for us is to stick to decisions made and comply with agreements," he said.

Earlier, the Economic Development Ministry said it expects a serious weakening of the ruble to 63-64 rubles per dollar. In the baseline scenario of the macro forecast until 2020, the ministry expects that the dollar exchange rate will be 68 rubles at the end of 2017, and 70.8 rubles at the end of 2018.

In the target (positive) version of the macro-forecast, the dollar exchange rate is expected at 68 rubles at the end of 2017, and at 70.3 rubles at the end of 2018.

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