Russian officials downplay consequences of ruble depreciation

Russia should not follow the suit of some emerging markets in an attempt to slow rapid depreciation of their national currencies, Financial Minister Anton Siluanov said Wednesday. He was referring to the central banks of Turkey and India which have raised their key interest rates to calm investors' anxiety over the exchange rates. "We have a strong current account, though ruble has weakened by 5.7 percent," Siluanov told reporters, denying that the Central Bank should raise its interest rate. "I believe (the ruble) will return to the average," Siluanov said. Also Wednesday, the minister for economic development, Alexei Ulyukayev, downplayed the consequences of the ruble spiraling downward on the inflation rate. "There are some additional inflation-related risks because if the current dynamic of exchange rate persists, that will naturally lead to growth of price for imported goods. This will exercise pressure to the consumer market," Ulyukayev told reporters. He said the pace of ruble's fall would not be high enough for the government to revise macro-economic forecast. On Wednesday, U.S. dollar briefly broke through the psychologically important 35-ruble level before sliding down below that five-year high mark. Local financial analysts believe that depreciation of Russia's currency against the U.S. dollar can be attributed to both international and domestic issues, and the trend will continue unless dramatic changes occur in the global market.