Rouble set to strengthen further

May 3rd, 2011 | By | Category: Central Bank

The Central Bank of Russia has indicated that it may raise interest rates to further strengthen the rouble.

First Deputy Chairman of the bank, pharm Alexei Ulyukayev, told reporters last week, "I see further upside potential". The rouble now stands at its highest level against the dollar since 2008.

Senior figures at the Central Bank – as well as politicians such as Russian Prime Minister Vladimir Putin – have made it clear that they see a strong rouble as a powerful weapon in keeping inflation down, a matter they understand is a key concern for voters.

Despite the fact that the dollar is falling against the rouble, analysis suggests that Russian citizens are not necessarily benefiting as everyday items such as groceries and fuel are priced in dollars. Analysts also suggest that the rouble is not gaining against the euro, which Russia pays for imports in.

Russians travelling overseas could potentially benefit from the current Russian economy as they could now get more dollars for their roubles. Even this, however, could be tempered by the fact that the cost of long-haul flights has been predicted to rise by as much as 20 per cent by the summer.

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