Interfax: Russia basically contented with hydrocarbon prices, says Putin

(Interfax – June 18, 2015)

Current prices on the hydrocarbon market could stay at this level for the next one or two years; this affects the ruble exchange rate against the U.S. dollar and the euro, and the Russian government is contented with this, Russian President Vladimir Putin said.

“It’s roughly clear how the hydrocarbon market is going to develop, and if nothing unusual happens, I think it will exist within this price niche for the next year or two. On the whole, the budget and the real sector have been adapted to it, this affects the foreign exchange rates and the ruble’s exchange rate against the [U.S.] dollar, the euro and other currencies. And we are basically and generally contented with all of this,” Putin said at a meeting with Russian industrialists.

The government will try to continue acting in the manner it has acted in before, he said.

“The Central Bank has a lot of regulation tools and a lot of various methods to increase or reduce the ruble stock in the country and buy foreign currency to replenish the reserve funds. By the way, the Central Bank did this quite actively earlier and then less actively. In other words, this is about regulation within the framework of market relations, and it is surely going to be used to ensure interests of our producers in the real sector,” Putin said.

A businessman attending the meeting asked Putin “to support the dollar, not to let it fall,” which should enable Russian producers to consolidate their stand on the market.

“As concerns the ruble exchange rate. First of all, we are talking publicly, and cameras are on here – this all is certainly a market sector. But at the same time, you must have noticed that, as soon as the ruble strengthened and went down 50 [rubles per $1], it then started gradually rising. And I should tell you and give credit to the government that the government does support the premise that you have just formulated,” Putin said addressing the businessman who asked him to uphold the U.S. dollar.

In particular, the Industry Ministry supports this premise, he said.

“All of us understand everything, and you can’t go overboard here, because the national currency’s excessive weakening has negative implications, and you and we know about this,” Putin said.

At the same time, Putin said this is important for the real sector in terms of consolidating its position on markets, and the government will continue to support the domestic industrial sector, he said.

“We will be improving and strengthening the instruments” of this support, Putin said.