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In Russia they explained the depreciation of the ruble

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Due to sanctions and corresponding currency control measures, capital transactions play a smaller role in exchange rate dynamics than before, according to the Central Bank of the Russian Federation.

Foreign trade has a major influence on the exchange rate of the Russian ruble. The depreciation of the national currency is due to the decrease in exports and increase in imports. This was stated by the director of the financial stability department of the Central Bank of the Russian Federation, Elizaveta Danilova, Interfax reported on Friday, November 1.

“We still have an open economy and the current account balance still plays an important role. The last weakening of the exchange rate in recent months is associated (what we see in the numbers) with a decrease in the surplus of the current account – due to a slight decrease in exports and an increase in imports, “he said at a meeting of the club of young economists.

According to Danilova, due to sanctions and related exchange control measures, capital transactions play a smaller role in exchange rate dynamics than before.

The weakening of the ruble has been one of the factors behind the increase in inflation, Danilova added. At the same time, the impact of the exchange rate on inflation due to inflation targeting has decreased, he stressed.

“The weakening of the ruble has also been one of the factors accelerating inflation and, perhaps, also led to an increase in inflation expectations, but other factors are also at work low unemployment rate, rapid wage growth is driving the growth of prices in the economy, and other factors,” said the head of the department.

We remind you that last week the Central Bank of the Russian Federation raised its key rate to a record level due to high inflation – up to 21%. Additional budget expenditures and the associated expansion of the federal budget deficit in 2024 have pro-inflationary effects, the regulator admitted.

Earlier, the media reported that the Russian authorities were preparing for the national currency to fall below the psychological threshold of 100 rubles per dollar. This could prove beneficial for the state budget amid planned spending increases next year.

It was also learned that the State Duma of the Russian Federation immediately allocated an additional 1.5 trillion rubles for the war in Ukraine.

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Source: korrespondent

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