27 May 2022 14:13

Balance of payments surplus effect on ruble is obvious, important to curb volatility - Russian PM

MOSCOW. May 27 (Interfax) - Russia's balance of payments surplus is skewed towards exports, which is causing the ruble to strengthen; the authorities see this and will strive to curb volatility in the currency market, Prime Minister Mikhail Mishustin said.

"We can see how the balance of payments surplus is affecting the exchange rate," he said at the fourth Leaders of Russia management contest.

"In this situation it is crucial to maintain stable conditions for import and export operations and to avoid high volatility in the ruble's exchange rate," he said.

The ruble had strengthened for a lengthy period due mainly to low demand for foreign currency caused by lower exports against the backdrop of a favorable export environment. This was interrupted only in recent days: the ruble corrected down on Thursday following the Central Bank's unscheduled decision to lower the key rate another 3 percentage points after inflation slowed abruptly in May.

"Inflation has come to a virtual halt according to the latest data. In the first 20 days of May it reached its lowest level (0.13%) for this month since 1999. And for the past week there was deflation (-0.2%)," Mishustin said.