Strong ruble hurting competitiveness on domestic market as well as exports - Mordashov

MOSCOW. Oct 31 (Interfax) - The decline of Russian manufacturers' competitiveness due to the strong ruble is seriously raising the question of measures to protect the domestic market from imports, the principal shareholder of steelmaker Severstal , Alexei Mordashov said.

"The ruble has become systemically stronger. There are probably many factors influencing this. The trade balance is becoming tighter, the ruble is strengthening and this, of course, has an impact on the competitiveness of national producers. Our export possibilities shrink and our competitiveness on the domestic market decreases. We are seriously seeing the appearance of many foreign goods on certain markets. Serious competition with imports, which, of course, seriously raises the question of protecting the domestic market," Mordashov said at the Russian Industrialist forum.

"One needs to be very careful here so as not to kill competition, but on the other hand we are currently seeing huge growth of protectionism throughout the whole world. Unfortunately, many retreats from playing by market rules. Apparently, in these circumstances, in these conditions we will also have to seriously think about protecting the domestic market. Let's hope that these trade protection measures that are now being actively worked out will be introduced more actively, I would even say more aggressively," he said.

"We sometimes face examples of unfair competition. Subsidization of exports to our country, transport expenses, for example. Well, we will probably have to apply more aggressively the practices of trade protection measures for national markets that are already established and widespread in the world," Mordashov said.

The state of affairs in Russian industry is not uniform, "but one can say that the situation is difficult and generally worsening," he said.

"Obviously this is all by and large a consequence of the policy of slowing the economy, which we are now seeing, that is being implemented. Its consequences are quite obvious. I'll cite a few figures from our experience in metallurgy. Steel consumption in Russia fell by 15% in the first nine months [of 2025]. And it fell 7% last year. Interestingly, despite the overall drop in steel consumption last year, steel consumption in machine building grew, it rose 4% last year. But this changed to a steep drop in demand this year. Steel consumption in machine building fell by 25% in the first nine months," Mordashov said.

"The main factor that is slowing the economy is monetary policy. A great deal has been said among the most diverse audiences about the influence of the Central Bank's high key rate on economic activity. It is very high, it is unprecedentedly high, far higher than the level of inflation, with which the rate traditionally correlates, but here today is not correlating. And this, of course, has very serious consequences for industry. Therefore, the situation in general is very difficult," Mordashov said.

He also noted the growth of the tax burden and risk of increases in non-tax payments.