Russia mulls interventions as rising currency bites exports
Russian officials say the move is a last resort against the appreciation of the ruble, which Moscow fears will affect fiscal revenues and exports.
Moscow could use excess energy revenues for currency interventions to rein in the ruble, which has hit a seven-year high.
Russia was “ready to sacrifice” part of its budget by using excess oil and gas revenues to intervene in the currency market, Finance Minister Anton Siluanov said on Wednesday.
“It should affect the exchange rate,” he said, adding that it was the measure of last resort.
Siluanov said the government will discuss the impact of the strong ruble on exporters next week.
“The exchange rate for exporters is now of fundamental importance,” he added.
A strong ruble is undesirable for the Russian government, which fears it will affect budget revenues and exports.
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51 rubles per dollar
Energy prices have skyrocketed since Russia sent troops to Ukraine on February 24.
In recent weeks, authorities have taken a number of steps to tame the rouble, which had plunged following sanctions against Russian military intervention in Ukraine but has since soared.
After the imposition of sanctions by the West, financial authorities introduced strict capital controls to stimulate the economy.
Since then, the Russian currency has rebounded dramatically and is now at its strongest since 1985.
The authorities have relaxed capital controls and the central bank has repeatedly lowered its key rate, but the Russian currency continues to appreciate.
Russia’s Finance Ministry said in May that domestic companies would have to sell 50% of their export earnings in foreign currency, a reduction from 80% previously.
The currency hit 51 rubles per dollar on Wednesday.
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Source: TRTWorld and agencies