External restrictions create an additional incentive for Russia to focus more on priority areas of development, Russian President Vladimir Putin at Russia Calling Forum.
Sanctions are harmful not only for the Russian, but also for the entire world economy, Putin said. Yet, sanctions “strengthen our determination to achieve results in priority areas of the development of the country.”
Russia is not going to impose any restrictions on the movement of capital and currency in the country, Putin said: “I want to emphasize that, despite the difficulties, we did not increase the tax burden on business, nor do we plan any foreign exchange restrictions or restrictions on the movement of capital,” he said.
According to him, conditions become more difficult, but such an environment only serves as an additional incentive “to concentrate resources and choose best solutions.” “This year’s events have once again convinced us of the correctness of the choice that we made many years ago,” said the president.
Despite currency fluctuations, fundamental factors to ensure stability of the Russian economy are very strong, the president believes. He particularly named “the balanced budget, significant reserves and strong balance of payments.”
The Bank Russia has enough instruments to ensure financial stability, Putin said. A step towards the floating exchange rate does not imply absolute refusal from foreign exchange interventions.
Russia intends to switch to the use of national currencies in foreign trade settlements with China and other partners in the field of energy industry, he said. Not that long ago, Russia’s Gazprom Neft conducted a first trial oil delivery to China for Russian rubles, he said.
“In the future, we intend to make active use of national currencies in energy resources trade and other forms of foreign trade settlement – both with China and other countries.” According to him, he sees the use of national currencies as a “serious mechanism to reduce risks.”
Meanwhile, the Russian ruble continues declining against the dollar and the euro. On October 1, the dollar hit the record level of 39.89 rubles per one dollar. Some bankers say that the Russian ruble hit the bottom and will soon start growing. Others doubt such an opportunity and say that they do not see any prerequisites for the growth of the ruble.
Deputy head of Vnesheconombank, former Deputy Minister for Economic Development Andrei Klepach said that the ruble will grow only if oil prices return to the level of 100 dollars per barrel. Should they fluctuate on the level of 93-97 dollars per barrel, the Russian ruble has no chances to strengthen its position in a short-term prospective.
Putin described the actions of foreign governments as “absolutely foolish” as they take actions to restrict business on such a promising market as Russia. “The Russian Federation takes this quietly. For us, a priority is Latin America, BRICS and Asia-Pacific Region, RIA Novosti reports.
The state will help companies and whole sectors of the economy, against which the Western sanctions were imposed. “The state is ready to stand by those sectors and companies that faced unjustified external sanctions, and of course, we will render them assistance in the form of capital increase – financial institutions in the first place,” Putin said.
“We will offer systematic work to improve business climate in Russia. Together with the business community, we have already introduced significant changes in the legal framework on the federal and regional levels. We have removed many barriers and optimized administrative procedures,” said Putin.
The inflation rate in Russia in 2014 will amount to 7.5-8%, the president admitted: “It will be about 8%, which is actually higher than last year, when it was 6.5%,” – he said. “The reason is understandable – the growth of prices of some food products. Nevertheless, and you also know it perfectly well, this is an extra incentive for us for agricultural development,” said the president.
“The monetary inflation does not exceed the planned indicator for this year of five percent,” he added.