Russia says ready to act on strong ruble

Russia’s economy minister said Friday that authorities expected the ruble to begin weakening soon, but would react if the currency continues to strengthen.

“We consider that the strengthening that we see on the market is short term in character and is not connected to fundamental factors,” minister Maxim Oreshkin told Russian news agencies a day after meeting President Vladimir Putin.

“Overall we expect that in the near future there will be some weakening of the ruble and then it will stabilise. The government is continuing to follow the situation attentively and will react if necessary.”

The ruble has risen dramatically in recent months and on Wednesday strengthened to fewer than 60 rubles to the euro for the first time since June 2015 as oil prices recovered.

Following Oreshkin’s remarks the currency dropped back to around 62 to the euro and over 58 to the dollar.

But at current levels the greenback is still 10 percent lower against the ruble than it was three months ago, and 23 percent lower than a year ago.

Oreshkin said that seasonal factors and an influx of cash from recent privatisation deals were to blame for the recent rise but the uptick has still confounded analysts.

Russia has begun a plan to buy foreign currencies with the excess income from oil revenues — in a bid to maintain Russia’s newfound competitiveness by stopping the ruble getting too strong.