THE INTERNATIONAL MONETARY FUND RECOMMENDS PERMITTING THE RUBLE TO FLUCTUATE
Izvestia (Moscow issue), July 15, 2003, p. 6
Finansovye Izvestia quotes Rogoff as saying that Russian economy needs inflation rates “of at least 4-5%” for optimal development. This prospect is quite possible if the ruble is allowed to fare on its own, Rogoff said.
The visiting specialist advised the Central Bank “to permit the exchange course free fluctuations in accordance with fluctuations of export prices.” He is of the opinion that it is because the Central Bank’s interventions that the market does not feel the fluctuations and that is wrong.
Oleg Viyugin of the Central Bank agrees that introduction of a freely floating exchange rate is a correct thing to do but does not think that “Russia is ready for it” yet. The financier accepts the fact that the nominal exchange rate is exaggerated.
“No matter what policy the Central Bank may pursue, the real exchange rate of the ruble is not going to change,” said Yevgeny Gavrilenkov of the Troika-Dialogue investment company.