- Putin lowers ruble volatility in economic speech
- Russian leader addresses economic forum in Far East
- Cenbank praised for August rate hike after Kremlin criticism
- Uncontrolled inflation will cause economic chaos, he says
VLADIVOSTOK, Russia, Sept 12 (Reuters) – Russian President Vladimir Putin on Tuesday praised the central bank for keeping a lid on inflation with double-digit interest rates and said there were no insurmountable challenges while curbing ruble volatility.
Putin used his speech at Russia’s Eastern Economic Forum in Vladivostok to project a mood of financial calm, weeks after the ruble crossed 100 to the dollar, prompting the Bank’s monetary policy and eventual 350-basis-basis emergency. An increase of 12%.
Annual inflation rose to 5.15% in August, above the 4% target, and most analysts polled by Reuters expect the Bank of Russia to raise rates again on Friday as Moscow balances its desire for lower rates and faster economic growth. The price goes up.
Putin’s economic aide Maxim Oreshkin appeared to urge the central bank to take action last month, saying the bank had responded „correctly” and „properly” to the ruble’s fall and its impact on inflation.
Putin told the conference: „Yes, it reduces credit opportunities and restricts the economy a little … but it is a significant factor for inflationary risks.”
He added: „Of course, we have to influence this, but if we miss a situation that leads to uncontrollable inflationary growth, it will be even worse for the economy in the long run.”
Putin said Russian officials, who discussed reintroducing some capital controls last month, had tools in place to keep the currency and markets under control, but promised there would be no sudden moves to curb ruble volatility.
„Overall, I don’t think there are any absolutely insurmountable problems or difficulties here,” Putin said.
Ruble bounce back
The ruble hit its strongest level in nearly six weeks against the dollar on Tuesday, as a gradual increase in foreign currency sales by exporters and, according to some analysts, verbal interventions from the Kremlin signaled that the ruble’s worst days are over.
Putin said „restricted” foreign currency earnings were one of several factors putting pressure on the ruble, but urged businesses to continue investing in Russia, pledging expanded trade links with eastern partners.
„They need to understand that working here is very reliable, and there is no need to step on the same rack,” Putin said, using a Russian phrase for repeating the same painful mistake.
But he admitted that high inflation made it „practically impossible” to develop business plans. Companies are also wary of the risks of foreign sanctions, asset freezes and windfall taxes that Moscow has imposed on some companies this year.
Putin said there was no need to raise tariffs further for the time being, after a series of lawsuits filed by Russia’s General Prosecutor’s Office targeting some Russian industrial assets.
„There will be no privatization, I can tell you that for sure,” Putin said.
Reuters reports, by Alexander Morrow; Editing by Gareth Jones and Kevin Liffey
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