Banker Says Ruble Won't Appreciate

TULA -- The Central Bank dismissed on Tuesday speculation among major banks of a ruble revaluation as the talk of irrational investors.

Konstantin Korishchenko, a Central Bank deputy chairman, criticized commercial banks that have advised their clients to go long on the ruble in anticipation of a currency revaluation.

"Maybe they have too many positions in the ruble and would like to close them and want to move the market," he told reporters on the sidelines of a Central Bank seminar.

"I think investment banks will not stop talking about ruble appreciation. For me, this speculation is the main criteria for distinguishing rational investors from irrational ones."

Some of the world's biggest banks, including Deutsche Bank, Merrill Lynch and Goldman Sachs, have recommended buying rubles on expectations that the Central Bank will allow the ruble to appreciate very soon.

President-elect Dmitry Medvedev and outgoing President Vladimir Putin, who is poised to become prime minister, both face galloping inflation as their main economic headache, which may threaten their popularity despite rising incomes because of a decade-long economic boom.

"The ruble appreciation is a pure political decision. Once Medvedev is inaugurated and if he gives instructions, they will make the ruble appreciate," said a currency dealer at a Moscow bank.