The Kremlin has obviously mastered the skills in abusing the patience of the Russian nationals. Indeed, the squeamish Europeans tend to go out in streets to express their disapproval of unpopular government measures and protect their rights. In contrast, the Russian government can easily introduce austerity measures, amend the constitution, and manipulate an exchange rate of the national currency. Then, the authorities can promptly handle occasional protests of the population.
Recently, Russia’s Finance Minister and First Deputy Prime Minister Anton Siluanov made a televised address, giving a far-fetched excuse for persistent weakness of the Russian ruble. The cunning policymaker explained that the US dollar is sold at an inflated price to people according to the rules. Following the budget rules, the US dollar is trading precisely in the current range of 64-65 rubles. If the budget rules had not been imposed earlier, the greenback would be now trading at 50 rubles. “The valid budget rule aims first and foremost to ensure predictability of the ruble’s exchange rate,” Siluanov commented on the situation. He noted that the wise budget rule tames extreme volatility of the national currency.
“The ruble would be firmer for sure. However, in case of the downward trend in the oil market, we would face the adverse effect. Higher volatility and unpredictability would certainly hurt entrepreneurs,” the policymaker invented the plausible argument.
Looking back, the Kremlin said that the ruble was not able to grow amid the slump of global oil prices. Lately, crude has hit a fresh multi-year high, so the government is making efforts to curb the advance of the ruble which benefits from the oil rally. According to another budget rule, oil revenues, gained from oil exports with an invoice price of over $40 a barrel, are allocated to the National Welfare Fund. Anton Siluanov insists that the budget rules should be obeyed to cushion the Russian ruble from sharp swings that is essential for running business.
