Interesting facts

22nd of May 2013

Foreign exchange policy and the exchange rate performance

Outlines of Russia's foreign economic legislation

The foreign exchange rate policy is pursued in accordance with “Basic directions of general state monetary and credit policy for 2010 and for the period of 2011-2012” passed in November 2009. In early 2010 the RF monetary authorities made ruble exchange rate corridor floating and it reached RUR33.7-36.7 per the USD/EUR basket in April 2010 due to the rise in world prices of Russian major export commodities. The mentioned basket consists of USD0.55 and EUR0.45.


In October 2010 ruble exchange floating corridor was RUR32.9-36.9 per the USD/EUR basket. If ruble exchange rate reaches a low or high limit of the corridor, the RF Central Bank is to interfere by buying or selling USD650 million compared to USD700 million before and is to move the low or high limit by 5 copecks down or up, accordingly. However the RF monetary authorities do not pursue a policy of completely free floating ruble exchange rate because of the political, economic and legal restrictions.


To neutralize excessive ruble amounts of commercial banks, the RF Ministry of Finance was holding auctions on sale of federal official bonds (OFZ). The total size of sales of federal securities by the RF Ministry of Finance amounted to RUR436.1  bn in Q1-Q3 2010 compared to RUR261.5 bn sold in Q1-Q3 2009, while the total size of repaying these securities from the federal budget reached RUR222.3 bn  in Q1-Q3 2010 against RUR155.1 bn in Q1-Q3 2009. The size of the RF Reserve Fund amounted to RUR1830.5 bn (USD60.5 bn) by January 1, 2010; that of the Fund of the National Prosperity – to RUR2769.0 bn (USD91.6 bn), accordingly. The size of the RF Reserve Fund amounted to RUR1258.3 bn (USD41.4 bn) by October 1, 2010, that of the Fund of the National Prosperity – to RUR2722.2 bn (USD89.5 bn), accordingly. By January 1, 2011 the size of the RF Reserve Fund amounted to RUR775.2 bn (USD25.4 bn); that of the Fund of the National Prosperity – to RUR2695.5 bn (USD88.4 bn). In 2010 the RF Reserve Fund is used for covering the RF federal budget deficit.


The Russian authorities are aware of the insufficiency of monetary instruments to curb inflation under conditions when they do not make considerable efforts to restrict appetites of the monopolies in the field of production and distribution of natural gas, electricity, thermal energy and other communal and railroad transport services as well as of oil products. That is why the consumer price index (CPI) was 106.2 in September 2010 as compared with December 2009; that is less than in September 2009 compared to December 2008 – 108.1. The consumer price growth is estimated at 106.4 in Q1-Q3 2010 against Q1-Q3 2009 (112.5 in Q1-Q3 2009 against Q1-Q3 2008).


The rise in real effective ruble exchange rate is 6.8% in September 2010 as against December 2009. Real ruble appreciation against USD is 2.0% in September 2009 as compared with December 2009, while real ruble appreciation against EUR is 14.5% in the same period.


There was ruble nominal devaluation in comparison with US dollar and nominal revaluation against euro in Q1-Q3 2010.


During January-September 2010 the official RUR/USD exchange rate fixed by the RF Central Bank went down by 0.5% (or from RUR30.24 per USD as on December 31, 2009 to RUR30.40 per USD as on September 30, 2009). In Q1-Q3 2010 the official RUR/EUR exchange rate went up by 4.7% (or from RUR43.39 per EUR as on December 31, 2009 to RUR41.35 per EUR as on September 30, 2010).

In December 2010 the CPI reached 108.8 compared to December 2009. As on December 31, 2010 official RUR/USD exchange rate was 30.48, while the official RUR/EUR exchange rate reached 40.33.


Source: Integrated foreign economic information portal,


Russian economic growth slows sharply

The pace of growth in the Russian economy, part of the once fast-moving Brics bloc of developing countries, slowed to 1.1% in the first three months of 2013.

The number contrasts sharply with the 4.9% notched up during the first three months of 2012.

The estimated figure came from deputy economy minister, Andrei Klepach.

He said the slowdown emerged after growth for January and February were revised down.

In February, the economy actually contracted by 0.4%, but a pickup in March itself helped boost the first quarter pace of growth.

Taking March on its own, the economy was 2.3% larger from a year earlier.

Last week, Russia revised down its forecast for economic growth this year from 3.6% to 2.4%, owing to slowing industrial output and consumer demand.

Other Brics nations, Brazil, India, China and South Africa, are themselves experiencing slowing economic growth.

Russia's economic minister, Andrei Belousov, warned recently that quarterly growth could turn negative before the end of the year.

"We are not in a recession yet, but we could end up there," he said.

Neil Shearing, from Capital Economics, said that Russia's economy had been hit by a weaker oil price and that the economy was likely to be sluggish for the rest of the year - although not entirely as a result of a weaker oil price.

He said: "Russia's economy is clearly worse off as a result of lower oil prices. After all, it is the world's second largest oil producer and oil and gas accounts for 60% of total exports.

"We expect growth in Russia to stay extremely sluggish in 2013-14 and our forecasts remain well below consensus. But this is largely due to structural factors that have caused trend growth to slow, rather than to the effect of lower oil prices."

Russian President Vladimir Putin has said that the global economic slowdown could damage Russia in the same way that it did during the credit crisis of 2008.

Meanwhile, Russian Prime Minister Dmitri Medvedev told Russian deputies on Wednesday that the country's slowdown was mainly caused by the weak economies of its trading partners.



19/12/2012 Minister A.R. Belousov spoke at 

the “Government Hour” in the Federation Council

December 19, 2012, Minister A.R.Belousov spoke at the “Government Hour” in the  Federation Council of the Federal Assembly of the Russian Federation.

Minister’s report was devoted to the role of constituent entities of the Russian Federation in improvement of investment climate.  

The session launched a discussion during which Minister answered the questions of the members of the Federation Council.

In particular, Mr. Belousov mentioned that high credit interest rates create risks for economic development: “this is a system problem, real interest rates running into positive values do hamper investment projects”. According to Minister, there are concrete proposals aimed at “reducing risks” – “this is the task of the coming months”.

In reply to the Senators’ questions, Minister also said that the real estate property tax, due to be introduced from 2014, must be allocated to city budgets. “Our position is that this tax must go to municipalities, which will allow them to form a certain financial basis for engineering development of construction sites”, added Mr. Belousov.

Minister informed the Senators that nearly entire land property was entered in the cadastre and valued up to date, although the quality of the valuation still raises questions; besides, only half of land plots in the cadastre are properly delimited. According to Minister, “completion of the work will cost approximately 70 billion rubles”.  He also stressed that the work had to be completed within the nearest three to five years, which is likely to be subsidized to the RF constituent entities. For this purpose “we are developing federal targeted program “Promotion of Ownership Right Registration”, which, hopefully, will solve all these problems”, said Mr. Belousov.   

Source: Ministry for Economic Development of the Russian Federation,