Russia: Foreign exchange

A weaker U.S. dollar will have a negative impact on the Russian economy, a top adviser to Russian President Vladimir Putin said in an interview with the Echo of Moscow (Ekho Moskvy) radio station on Friday.

A weaker dollar contributes to the overall strength of the Russian ruble, which is negative for the economy, Arkady Dvorkovich, director of the Russian president's expert directorate.

"A stronger ruble will lead to (additional) inflow of capital, cash foreign currency and as a result, to additional inflationary pressure," he said.

Dvorkovich was commenting on the recent weakness of the U.S. dollar. On the local foreign exchange market the dollar dipped below 26.0 against the ruble on Thursday before recouping some of its losses on the following day to close above the threshold mark.

Dvorkovich said that the Central Bank of Russia's major goal is smoothing foreign exchange rate fluctuations, noting that capital inflow is likely to continue in Russia.

Last year net capital inflow was registered in Russia for the first time in recent years. The turnaround was accompanied by elevated world oil prices. Russia's underdeveloped financial system is largely unable to absorb additional money inflows, which has been a major inflationary factor for the Russian economy.

Source: prime-tass.com