PRESS: Russian Fin Ministry offers to restart ruble rate controls

MOSCOW, Feb 25 (PRIME) -- The Russian Finance Ministry has proposed to reintroduce control over the ruble by selling foreign currency, if the oil price is below U.S. $50 per barrel and storing it if the oil price is higher, business daily Vedomosti reported Thursday, citing Deputy Minister Maxim Oreshkin.

“This is not only a way to ensure a stable fiscal and tax framework in the middle and long term but also the only effective way to isolate volatility of the real foreign currency rate from the oil price volatility,” Oreshkin said.

The central bank floated the ruble in November 2014. Until then, it controlled the rate with foreign currency interventions. The Finance Ministry’s proposal resembles an earlier concept of oil-price dependent budgetary spending. The average oil price for three previous years was the benchmark defining whether to spend or store the state budget revenue.

The ruble control mechanism can be restarted in 2018, Vedomosti reported.

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