Russian President Vladimir Putin delivered a speech at the Eastern Economic Forum in Vladivostok, praising the central bank for its handling of inflation and downplaying concerns about the volatility of the rouble. This comes after the rouble experienced a significant slump against the dollar, leading to criticism of the central bank’s monetary policy and an emergency rate hike. Putin commended the bank’s reaction to the rouble’s decline and its impact on inflation, stating that the rate increase was a necessary step to control inflation risks. While acknowledging that this may constrain lending and the economy to some extent, Putin emphasized the importance of preventing uncontrollable inflation growth in the long term.
Putin assured attendees at the forum that Russian authorities have the tools to maintain control over the currency and markets, but he stated that there would be no sudden actions taken to limit rouble volatility at present. Despite the challenges faced, Putin expressed confidence that there are no insurmountable difficulties in managing the situation.
The rouble has since rebounded, reaching its strongest level against the dollar in six weeks. This can be attributed to gradual increases in foreign currency sales by exporters and verbal interventions by the Kremlin, which signaled that the worst days for the rouble were over. Putin acknowledged the various factors influencing the rouble, including the cautious return of foreign currency earnings, but encouraged businesses to continue investing in Russia and assured them of expanded trade links with eastern partners. However, high inflation poses challenges for forming business plans, and firms remain wary of foreign sanctions, asset seizures, and recent tax changes.
In his speech, Putin reassured businesses that there are no plans for widespread de-privatization, addressing concerns raised by lawsuits filed by the Russian general prosecutor’s office targeting certain Russian industrial assets. He also stated that there is currently no need to raise additional taxes. These reassurances aimed to alleviate businesses’ concerns and foster a more stable economic environment.
Overall, Putin’s speech projected a sense of financial calm and confidence in the central bank’s actions, while acknowledging the challenges faced and promising measures to maintain stability and attract investment in the Russian economy.