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Stronger ruble limits economic ‘overheating’ risks — Bank of Russia

Imported goods and prices become more expensive when the national currency weakens from the standpoint of domestic consumer and investment demand, which also supports competitiveness of domestic products on the internal market and stimulates import substitution

MOSCOW, August 12. /TASS/. The higher rate of the national currency is counter-cyclic for the economy and limits its ‘overheating’ risks, according to draft guidelines of the state monetary policy for 2023 and the period of 2024 and 2025.

"This occurs in particular through greater affordability of imported goods and services for domestic buyer. Therefore, free exchange rate forming provides sufficient flexibility of relative prices, enabling economic participants to respond quicker and with lower costs to a change in environment," the document reads.

Imported goods and prices become more expensive when the national currency weakens from the standpoint of domestic consumer and investment demand, which also supports competitiveness of domestic products on the internal market and stimulates import substitution.