Page 100 - RusRPTJul22

alternative sources of gas to fill tanks sufficiently to get through the next cold season without drastic action like gas rationing.
“The ruble, look how it has strengthened!” Vladimir Putin proudly stated in his speech at SPIEF. And before that, he remembered “spells about the dollar for 200 rubles - it was and remains an instrument of information warfare.” But in response to a leading question from moderator Margarita Simonyan and Putin admitted that a strong ruble "has pluses and minuses." Officials in the government's economic bloc have been talking about this problem for a month now.
Economic Development Minister Maxim Reshetnikov said back in May that a strong ruble "is a problem in the long run" - Russian producers suffer from it, which is difficult to compete with imported goods. The minister warned that all import substitution projects would fail because they would be uncompetitive. But so far, neither cosmetic nor radical measures to ease currency controls, nor signals from the Central Bank have helped to significantly weaken the ruble. At SPIEF, Reshetnikov echoed that obvious point: the ruble has overvalued itself, and that creates problems for both exporters and importers, he said. Since the beginning of May, both officials and experts have feared that Russia will fall into a deflationary spiral, when falling prices due to low demand lead to the ruin of companies, rising unemployment and a further drop in demand. Rosstat is already recording deflation for the second week in a row. Reshetnikov allowed monthly deflation in June.
“Our ruble is over strengthened, 55-60 rubles per dollar is too strong a rate. Especially against the backdrop of deflation and high interest rates,” said First Deputy Prime Minister Andrei Belousov at SPIEF. And he said that the rate of 70 to 80 rubles per dollar is comfortable for the Russian industry. But the Central Bank does not target the exchange rate, so it "is developing as it is," the official said.
Finance Minister Anton Siluanov, as the one responsible for the budget, also cannot like the expensive ruble. He said yesterday that the strengthening of the ruble could lead the Russian economy to the "Dutch disease" - a situation in which the influx of foreign currency through commodity exports causes a decline in the national economy.
Only the head of the Central Bank, Elvira Nabiullina, has no complaints about the strengthening of the ruble, whose department in late February - early March made a lot of efforts to stop the fall of the national currency. At the end of May, Nabiullina said she did not
100 RUSSIA Country Report October 2020 www.intellinews.com