Econ minister says ruble stronger than fundamentally justified

PARIS, Mar 14 (PRIME) -- The Russian ruble is stronger than fundamentally justified, Economic Development Minister Maxim Oreshkin told reporters on Tuesday.

“Inflation is lower than our expectations now due to several reasons, including because the exchange rate (of the U.S. dollar) is lower than our expectations. The rate has deviated from its fundamental level, the deviation persists,” Oreshkin said.

Russian inflation slowed down to 4.5% on the year as of March 6, reached 0.9% since the beginning of the year and was zero over the last few weeks,

The ruble is fluctuating around 59 against the U.S. dollar, while the Economic Development Ministry forecasts the average annual rate in 2017 at 67.5 rubles per dollar.

Oreshkin said that oil prices are under pressure from uncertainty about the OPEC plans and higher oil output in the U.S.

“This is a combination of factors, both quite an aggressive output growth in the U.S., and other stories on the American oil market, such as issuance of permits for drilling in the Gulf of Mexico, and rumors about a possible change in the OPEC tactics. These rumors influence expectations, of course,” he said.

The Brent price decreased below U.S. $51 per barrel on Monday.

Oreshkin said that the ministry has never expected that a $55 per barrel oil price will remain for a long time.

The ministry can change the 2017 annual oil price forecast after seeing the level of January–March, he said.

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