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. Last Updated: 07/27/2016

Potanin: Ease Ruble Exchange


NEW YORK -- Russia's First Deputy Prime Minister Vladimir Potanin said he thinks the government exchange rate policy for the ruble should be made more flexible in 1997.

"In my view, the ruble corridor in its current form has served its purpose in reducing inflation and stabilizing the exchange rate," Potanin said Thursday at an event sponsored by the U.S.-Russia Business Council, a Washington-based trade and investment association.

After the current target band expires at the end of this year, Potanin said, "I don't think there should be any kind of tough policy in this field."

Potanin didn't spell out what kind of policy he envisioned for next year, noting only that the Central Bank is the key player on this issue. Central Bank officials have said a decision on policy for 1997 will be announced before Dec. 1.

Russia first imposed the ruble corridor in the summer of 1995, pledging to hold the ruble's exchange rate against the dollar in a broad band.

Since June, the boundaries of the corridor have been adjusted daily to account for the effect of inflation.

Potanin noted that a key factor in setting policy for next year will be ensuring that the returns in the currency market aren't so high as to divert investment from domestic markets.

Potanin, 35, former chairman of powerful Uneximbank, made his debut at the annual meetings of the International Monetary Fund and World Bank.

IMF managing director Michel Camdessus said Thursday that Russia is doing well and is on target under terms of its $10 billion, three-year loan from the IMF.

"In spite of the enormous difficulty that Russia has been living with for some time, Russia is complying with the program," Camdessus told the closing press conference of the annual meetings.

Camdessus noted that the tough program has already delivered zero inflation in August, and Russian authorities are moving to strengthen tax collection.

"On this basis, I am ready as far as I'm concerned to give to the London Club, to the Paris Club, my positive assessment of the progress of Russia and I hope that Russia will continue ... finding the support it deserves," he said.

After talks in Washington with Russian officials, Fund officials said on Wednesday that the IMF looked set to hand over the latest slice of its $10 billion loan to Russia.

The next IMF monitoring team will arrive in mid-October, Central Bank chairman Sergei Dubinin said in New York, Interfax reported.