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. Last Updated: 07/27/2016

Chubais Sees Rise in Investment

HONG KONG -- Rising foreign investment may force Russia to change its exchange rate policy next year, First Deputy Prime Minister Anatoly Chubais said Tuesday.

"I think it is completely realistic that Russia in the coming months will see a sharp improvement in the flow of foreign investment, foreign capital," Chubais told reporters at the World Bank/International Monetary Fund annual meetings.

"It means that we will then need to seriously reconsider how we are going to build our currency policy, how we are going to build our ruble corridor next year. ... I do not rule out that we will need to view things a lot differently in order to avoid the danger of a crisis," he said.

Russia's present monetary policy relies on central bank intervention to keep the ruble in a defined corridor against the dollar.

Chubais said that investment flows into Russia had tripled in the first half of the year compared to a year earlier. The ruble is expected to firm against the dollar for the rest of the year, as more money comes into the country.

Southeast Asian currencies have been hit by crises of confidence caused in part by rising capital inflows and current account deficits.

Russian Central Bank chairman Sergei Dubinin said Sunday he expected to continue the current ruble policy next year.

Chubais told a World Bank seminar that strong control of the ruble had been crucial to bringing down inflation, which he said would drop to 5 to 7 percent next year from about 13 percent this year.

"We have managed to put a stop to a decline in output," Chubais said. "We think that at the start of next year we will see the start of economic growth."

But Chubais told the plenary session of the meetings that Russia was still not satisfied with tax collection, which is about 75 percent of target levels.