Russia's Central Bank will not allow the real rate of the rouble to grow stronger by more than 7% in case oil prices exceed the projected level. Chairman of the Central Bank Sergei Ignatyev said this following the government session highlighting major areas of the national credit and monetary policy.
The Central Bank's forecast proceeds from the Urals oil prices of no more than $22 per barrel. At present, these prices are maintained at the level of $28-29 per barrel.
According to Ignatyev, in the first seven months of 2003 the rate of the rouble grew stronger by 4%, and by the end of the year this figure is expected to reach 6%.
In an effort to strengthen the rate of the rouble, the Central Bank is going to use traditional methods, such as regulating the monetary base and the rate policy, all the while decreasing the Central Bank's participation in the currency market. The Bank of Russia will only interfere in case of sharp fluctuations of currency rates. The chairman of the Central Bank added the current rate of the rouble was more marketable than before.
At the same time, Ignatyev believes that Russia is yet to face the prospect of low oil prices. If we do pass this test, international respect for our policy and national currency will increase, concluded the head of the Central Bank.