Govt cannot directly influence 'fairly strong' ruble, expects monetary policy easing - Russian deputy PM

ST. PETERSBURG. June 20 (Interfax) - The ruble's current exchange rate is 'fairly strong', but it cannot be considered optimal for the Russian economy, and the government cannot directly influence it and expects a softening of monetary policy amid low inflation, Russian Deputy Prime Minister Alexander Novak told reporters on the sidelines of the 2025 St. Petersburg International Economic Forum (SPIEF 2025).

"I wouldn't name a specific figure [for the optimal exchange rate]. But overall, I also believe the exchange rate is fairly strong," Novak said when asked whether he agreed with Sberbank CEO Herman Gref's opinion that the equilibrium exchange rate for exporters and the budget would currently be over 100 rubles per dollar.

"Certain factors influence this [the exchange rate], including tight monetary policy, high deposit rates and low demand, especially for imports. We [the government] cannot directly influence the exchange rate in a concrete way," Novak said.

"Everything related to supply and demand - we are certainly working on that. We are implementing appropriate fiscal policy, stimulating supply. These are indirect factors that can undoubtedly have an impact. We are promoting the development of foreign economic activity," he said.

"We see that exporters are currently in a difficult position due to the strong exchange rate, and this of course also affects the economy, primarily contributing to lower inflation, which is what we are observing," he said.

"Therefore, we primarily hope that monetary policy will soften as inflation is already at a low level, and this in turn will also influence the exchange rate," Novak said.

"The exchange rate is far from equilibrium today," Gref said on Friday. "It is obvious that the equilibrium exchange rate would be 100 plus rubles per dollar. Today, we have 78-79 rubles per dollar," he said. The current strengthening of the ruble is affecting exporters and the budget, he said.

"This is, of course, being felt very strongly by all our export industries, and first and foremost, we see that the budget is facing an increased deficit. By the end of the year, it will obviously be necessary for the Finance Ministry to cover the deficit with new sources. Most likely, this source will be market borrowing," Gref said.

Russian First Deputy Prime Minister Denis Manturov said on Thursday that the ruble's strengthening is putting pressure on non-commodity, non-energy exports. In his opinion, the optimal exchange rate for participants in foreign economic activity would be around 100 rubles per dollar. He estimated that this would be a comfortable exchange rate for both exporters and importers.

Also on Thursday, VTB CEO Andrei Kostin said that the ruble has strengthened too much and needs to be steered back towards more fundamental levels.

"I believe that this [the ruble's strengthening] is harmful now, and we need to steer it back. We think that 90-100 is a normal level today. Our analysts aren't always precise - they predict 90 by the end of the year. I think 90 plus would be good. In my opinion, around 100 would also be better for the budget. We have a very big budget problem [due to the decline in ruble revenues from exports caused by the strong exchange rate]," Kostin said.

As reported, the Economic Development Ministry forecasted in April an average annual dollar exchange rate of 94.3 rubles in 2025. It expects the dollar to reach 98.7 rubles by the end of the year.