Ruble steady despite Kremlin’s deficit forecast

The ruble strengthened on Thursday, taking a step back from a government-set threshold against the dollar and euro despite the Kremlin’s forecast of a 6-percent budget deficit this year.

The Russian currency was up by nearly a ruble, to 40 rubles against a basket comprising dollars and euros, farther from the level of 41 that the Central Bank announced on Jan. 22 in an effort to halt the slide of the currency.

The Central Bank’s head for financial markets Sergei Shetsov told an investment forum in Moscow that defending the currency at 41 rubles would not be “too painful,” Russian news agencies reported.

Arkady Dvorkovich, economic advisor to President Dmitry Medvedev, projected this year’s budget deficit to be “certainly be no less than 6.1 percent of the GDP, or perhaps more”, he said, according to the RIA-Novosti news agency.

Meanwhile, Russia’s foreign reserves rose $1.6 billion in a week ending Jan. 30, to $388 billion, the Central Bank said, indicating that it had stopped spending money to prop up the flagging ruble.

The Associated Press

Leave your comments.

In order to leave comments, please receive authorization on the site.