Andrei Illarionov, President Putin's Economic Advisor, believes the downslide of US dollar may not continue long. While talking on Friday at a press conference, Mr. Illarionov disagreed with the forecast made by George Soros, a widely known financier, who had said the US currency would lose 30% in relation to euro over the following decade.
In the meantime, Mr. Illarionov is worried about Russia's losses in connection with dollar's current dive. He says every time US dollar loses 1% in relation to euro, Russia is shorted by USD 350 million in terms of lowered purchasing power of our country's foreign currency reserves.
The President's advisor believes there is no foretelling short and mid-term fluctuations of currency ratings and the prices of oil. For instance, he reminds that the current upward movement of the rating of euro was being foretold at the moment the new European currency first appeared. 'One may say', Mr. Illarionov added, 'that this forecast is coming true, yet those who put their money on euro in 1999 have already lost out. Mr. Soros is a very well known man, a great financier, philanthropist, and thinker. He has and willingly shares lots of great ideas. However, foretelling currency ratings is a thankless occupation'.
Mr. Illarionov further said that, as went long-term prospects, the ratio between currency values depended on the ratio between economies where, he was sure, US had a definite long-term advantage, US economy developing more dynamically, the country's market more flexible. The US, according to him, had a smaller budgetary deficit and less governmental regulations, which made for lower costs.
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969