Putin asks Central Bank, gov't for harsh measures to fight speculators
MOSCOW. Dec 4 (Interfax) - Russian President Vladimir Putin is asking the Central Bank and the government to take harsh measures in fighting speculators on the currency market.
"Today we face a reduction in forex receipts and, as a result, the weakening of our national currency's exchange rate," he said.
"You know that the Central Bank has moved to a floating exchange rate, but that doesn't mean that it did away with impacting the ruble's exchange rate or that the ruble can become an object of financial speculation with impunity," he told the Federation Council.
"I'm asking the Central Bank and the government to carry out harsh, coordinated action to discourage so-called speculators from making a game of fluctuations in the Russian currency's exchange rate. The authorities know who these speculators are, and there are instruments for having an impact on them. The time has come to use these instruments," Putin said.
The Central Bank on November 10 abandoned its bicurrency corridor as the ruble came under speculative attacks, and stopped conducting regular currency interventions, but said it might conduct ad hoc interventions if there was a threat to financial stability. It did so on December 1, when the ruble plunged more than at any time since 1998 and hit 54 rubles/$1 and 67 rubles/EUR1. The Central Bank succeeded in halting the slide by selling $700 million.
The Central Bank intervened on the market verbally on Thursday, saying the ruble had deviated substantially from its fundamental value and that this could pose a risk to financial stability. To stabilize the currency market, the Central Bank said it was lowering rates on repo operations for all durations effective December 4.
President Putin also said in his address that a robust macroeconomic environment ought to be preserved and that inflation should be brought down to 4% in the medium term.
"But not, I stress, by stifling business activity. We must finally learn to combine two goals, curbing inflation and stimulating growth, harmoniously," Putin said.
