Growth in export revenue creates prerequisites for maintaining strong ruble, despite resumption of operations under fiscal rule - Central Bank of Russia

MOSCOW. May 7 (Interfax) - The growth in export revenue creates prerequisites for maintaining a strong ruble exchange rate in the coming months, even despite the resumption of operations under the fiscal rule, the Central Bank of Russia said in its summary on the key rate.

The ruble has strengthened since the CBR's meeting in March and has returned to the lower bound of its fluctuation range over the past 12 months. The main reasons for this strengthening were an increase in foreign currency sales by exporters, whose revenue grew amid high global commodity prices (taking into account lags in its receipt), as well as the temporary absence of foreign currency purchase operations as part of the fiscal rule, the CBR said.

The ruble continued to be supported by a high interest rate differential, subdued import demand, limited opportunities for residents to place funds in foreign assets, import substitution and existing foreign trade restrictions.

"A strong ruble supports disinflationary processes. The growth in export revenue creates prerequisites for maintaining a strong exchange rate in the coming months, even despite the resumption of operations under the fiscal rule. The impact of rising external inflation on the dynamics of domestic prices is likely to be limited due to the strengthening of the ruble, the operation of damper mechanisms, and the country structure of imports," the CBR said.