The Ruble is Rubble

I woke up on Wednesday last week and thought that I’d predict that the ruble would close under 80 on Friday. But even as I thought it, the ruble was collapsing into the 80s. According to Bloomberg, it dropped as low as 85.95. However, through a combination of a rise in the oil price to above $30 a barrel, and some creative intervening, the Central Bank managed to close Friday at 78.14.

As the ruble was fluctuating on Wednesday, Russian MP Dmitry Gudkov wrote:

How interesting now, in hindsight, with the dollar at 80, to remember the old predictions of the government and the president about the “ruble”.

No comments:

In February 2015, the director of long-term strategic planning of the Russian Ministry of Finance, Maxim Oreshkin: “the strengthening of the ruble is due to a stronger balance of payments, and so we expect for the year a very strong current account balance of payments, it cannot be excluded that this trend will continue.”

In February 2015, Central Bank chief Elvira Nabiullina: “In the future, we do not expect such a sharp drop in oil prices and the depreciation of the ruble.” (The exchange rate was about 80 to the USD.)

March 2015, the first deputy chairman of the Central Bank Alexei Simanovsky: “There should not be this year any sudden bursts of the ruble relative to the currency.” (He’s still speaking about 2015).

April 2015, the head of VTB24 Mikhail Zadornov, “The ruble has depreciated significantly, and I do not share the position that it must now be further depreciated further from its current level.” (USD – 52 rubles).

April 2015, Prime Minister Dmitry Medvedev: “with the improvement of the economy, I am sure, the ruble will be strengthened.”

August 2015, Vladimir Putin praised the Central Bank for the strengthening of the ruble, “I see how persistently you are going down this path.”

October 2015, Russian Finance Minister Anton Siluanov: “It was not necessary to prevent the strengthening of the ruble. Russia had been ill with the Dutch disease, and is now beginning to recover.”

January 2016, Economic Development Minister Alexei Ulyukaev: “From my point of view, it [the ruble] is more likely to move toward strengthening.”

And my favorite from the Governor of Vladimir Region Svetlana Orlova: “We are a non-oil (producing) region, and (the fall in oil prices) won’t affect us much.”


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