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Putin confident ruble to stabilize soon, blames speculative moves
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Russian President Vladimir Putin yesterday expressed confidence that the ruble, which has lost nearly a quarter of its value so far this year, would soon stabilize as Russia’s central bank said it would intervene only if “financial stability” was threatened.
The Russian strongman blamed speculation for the currency’s volatility, insisting that it was “absolutely” no reflection of the country’s economic situation.
“We can see speculative moves in the exchange rate, but I think that will end very soon, given the actions taken by the central bank in response to the speculators,” Putin said in Beijing, where he is attending the Asia-Pacific Economic Cooperation summit.
The Bank of Russia said on Friday that it was ready to step in to protect the crashing ruble, after the currency lost 10 percent in value last week alone amid plunging oil prices and the fallout from the Ukraine crisis.
Then yesterday the central bank in Moscow announced it was removing the range it had fixed for the ruble up to now, allowing it to float freely on the market.
But that “did not amount to a total renunciation of any interventions in the currency market, which would be possible in case a threat to financial stability appears,” it said.
The Bank of Russia, which has been planning to shift to inflation-targeting like central banks in the West, had progressively enlarged the range for the ruble to float over past years, thereby limiting its possible interventions.
But the ruble has fallen as Western sanctions on Russia over its role in the Ukraine crisis have led to a surge in capital flight from the country.
The Bank of Russia said in a statement on Friday that it spent US$30 billion in October to keep the ruble afloat, vowing to spend more if needed “as well as use other financial instruments at its disposal.”
“The financial authorities have taken all the necessary measures,” Putin said yesterday, adding that they do not intend to impose capital controls.
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