This pool image distributed by Sputnik agency shows Russian President Vladimir Putin meeting with the governor of the Tver region at the Kremlin in Moscow on August 9, 2023.
Mikhail Klimentyev | AFP | Getty Images
The Russian ruble briefly hit 100 against the US dollar on Monday, near the president’s 17-month low. Vladimir PutinThe economic advisor blamed the loose monetary policy for the sharp devaluation.
The ruble has depreciated against the greenback by almost 30% since the beginning of the year. The Bank of Russia attributed the decline in the country’s trade balance as Russia’s current account surplus fell 85% year-on-year from January to July.
By noon in London, the ruble was trading just above 101 against the dollar. Russia’s central bank later announced it would hold an extraordinary rate meeting on Tuesday. In a statementIt said the meeting would be held “to consider the issue of the key rate level” and that it would announce the board’s decision at 10:30 a.m. Moscow time.
Putin’s economic adviser Maxim Oreshkin told Russia’s state-owned Tass news agency that the devaluation of the currency and the spurt in inflation were mainly due to “loose monetary policy” and that the central bank had “all necessary to normalize the situation”. equipment”. near future.”
“A weak ruble complicates the restructuring of the economy and negatively affects the real income of the population. In the interests of the Russian economy – a strong ruble,” He saidAccording to Google Translate.
The central bank on Thursday halted foreign currency purchases for the rest of the year to prop up the currency, raising fears of rising inflation as Russia seeks to radically transform its economy in the face of growing isolation and punitive Western sanctions. Is.
According to new data from the Federal State Statistics Service, Russian GDP grew more than expected in the second quarter by 4.9% year-on-year. shown on fridayrebound from 1.8% contraction in the first quarter.
But William Jackson, chief emerging markets economist at Capital Economics, said a limited slowdown in the economy is likely to add to inflationary pressures and result in a tightening of monetary policy, weakening growth for the rest of the year and into 2024.
“Perhaps the main risk to the economy is that if the government continues to loosen fiscal policy to support the war effort, that will make Russia’s economic vulnerabilities worse,” Jackson said.