Plans to float the rouble to go ahead

Jun 18th, 2014 | By | Category: Central Bank

Russia’s central bank has offered further indications that it is going to float the rouble at the beginning of next year.

Confidence in the Russian economy has stabilised recently in the aftermath of Western sanctions placed on the country over its involvement in the Ukraine crisis. Yesterday (17 June), viagra the central bank revealed that it is continuing to scale back its support for the rouble with a floatation of the currency looming in early 2015.

Essentially, the bank said that there will be a combination of moves executed that will effectively reduce the size of interventions to curb currency market fluctuations. This signals the resumption of a long-term policy shift to make inflation a more important benchmark than the exchange rate after several months on hold while the bank was forced to defend the rouble, weakened by the crisis in neighbouring Ukraine, Reuters reported.

The newswire explained: “As part of the plan, the rouble’s trading corridor will be abolished altogether from January next year and regular daily interventions will cease, although the bank will reserve the right to make discretionary interventions in the interests of financial stability.”

Ivan Tchakarov, chief Russia economist at Citi, commented: “The most important conclusion is that this signifies there hasn’t been a change of direction. This is confirmation: we have a plan and we’re going to stick to it.”

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