The Russian authorities are studying returning the ruble to its “optimal price”, after its strengthening against the main international currencies in recent weeks, said the number two of the Russian Government, Andréi Belousov, in a interview published this Monday by the Interfax agency.
“As for the optimal price of the ruble, there is a more or less agreed opinion that it is in the range between 70 and 80 rubles per dollar,” said the Russian deputy prime minister.
Currently, the official ruble price is 56.7 units per greenback.
Asked about the terms in which the Russian currency should reach its optimum price, Belousov replied: “As soon as possible.”
In this regard, he highlighted the importance of stimulating domestic demand and increasing imports
“Lately we have seen that, also thanks to the government’s efforts, imports are increasing. That is, we are solving the problem of the trade blockade,” said the deputy prime minister, referring to the international sanctions adopted against Russia for its “special military operation” in Ukraine. (started on February 24).
He admitted that weekly Russian imports fell as much as 50% compared to the week before the start of the Russian military campaign in Ukraine.
“Currently imports compared to the February level fluctuate between 65% and 75%,” Belousov said.
He insisted on the need to increase imports, which – he explained – not only have to do with the price of the ruble, but also with internal demand.
“If there is no demand, there will be no imports, and therefore additional pressure will arise on the ruble in the direction of its strengthening,” he stressed.
The deputy prime minister affirmed that the contraction of the Russian economy in 2022 will be less severe than that contained in the latest forecast of the Russian Ministry of Economy, which puts the fall in the country’s GDP at 7.8%.
“Based on calculations, and on the processes that are taking place in the economy, I consider that the fall will be less, in the range of between 3% and 5%,” he advanced.
But to reach these figures, Belousov stressed, “the most important thing is the increase in domestic demand.”
According to the latest forecasts of the Central Bank of Russia, the country’s GDP will fall between 8% and 10% this year.
However, both the regulator and the Ministry of Economy have already announced that they will review their estimates of the economic contraction and reduce the magnitude of the drop in GDP.