Kudrin: Ruble volatility to remain amid tight sanctions rhetoric

MOSCOW, Sep 6 (PRIME) -- The ruble’s volatility will remain on the back of tightening of the sanctions rhetoric and expectations of tighter U.S. sanctions against Russia in the future, the Audit Chamber’s head Alexei Kudrin told reporters at a forum on Thursday.

“The volatility (of the ruble) will remain, well, and high uncertainty. It is also connected with the expectation of a second new package of sanctions against Russia related to cybercrime, and secondly, given new data on the “Skripal case”: there are expectations that the second stage of sanctions may be painful as well. That’s why, I think, the market is reacting. But this may not be enough, I’m not ready now to show the whole picture of factors influencing volatility,” he said.

Kudrin also said there are prerequisites for an increase in the central bank’s key rate taking into account expected acceleration of inflation.

“Now, given the increased risks of inflation and the predicted increase of inflation next year, as you know, according to official figures, to 4.3%, of course, there are certain risks. Prerequisites for raising the rate exist. The question is whether it is necessary to raise it,” he said.

A reduction of the key rate is not realistic now, he added.

Kudrin also said he believes that Russia should remain a member of international financial organizations.

Russia may increase settlements in national currencies, but a full rejection of the dollar may cause high costs, Kudrin also said.

“I think that Russia can increase the share (of settlements) in national currencies, but it is impossible to replace it (the U.S. dollar). Settlements in national currencies bear more costs than settlements in dollars, we should understand it,” he said.

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