Events

 
 
 

Prime Minister Dmitry Medvedev holds a meeting on financial markets

 
 
 

Speaking about the current problems affecting the global financial markets, the Prime Minister stressed that “our goal remains the same: to monitor the present situation calmly and to rebalance our financial system wherever necessary, guided first and foremost by the approaches that we have developed during and after the global financial crisis.”

Transcript of the beginning of the meeting:

Dmitry Medvedev: Colleagues, our meeting today will focus on the current state of the financial markets, the global financial market, and, of course, the impact of this situation on our economy and our finances. The causes of the state of the world financial system are well known. They are connected to a large extent to the situation that developed in Europe around individual states and the decisions made, or, unfortunately, that have not yet been made, by the European Union. There are also other things which influence the financial markets. Our goal remains the same: to monitor the present situation calmly and to rebalance our financial system wherever necessary, guided first and foremost by the approaches that we have developed during and after the global financial crisis.

There are a set of tools and general criteria that guide the Central Bank as the primary regulator of financial activity in our country. I know that yesterday Mr Ignatyev (Sergei Ignatyev, chairman of the Central Bank of Russia) commented on the subject. Nevertheless, before we start this meeting, which will now be closed to the public, I would like you to say some words on the causes and consequences of the current global financial situation and how it affects our own financial system, as well as on the measures that the Central Bank has taken or will take to safeguard macroeconomic stability and to maintain this year’s projected indicators and ratios.

Sergei Ignatyev: Thank you. The currency market in Russia is indeed undergoing a difficult period, but there are reasons for this. The primary reason is the worsening economic crisis in Europe, the associated sharp drop in world prices for raw materials, above all for oil, the expected deterioration of Russia's balance of payments and the consequent depreciation of the rouble against foreign currencies. The Central Bank implements foreign exchange intervention. We act in accordance with the rules for floating exchange rates. And now we are implementing foreign exchange intervention, because the value of the currency basket is close to the upper boundary of the band. That is, it has fallen into that zone where we need actively to implement foreign exchange intervention.

Yesterday, we sold $200 million and the situation in general is under control. As for the immediate future, as I said before, if the price of oil ceases to fall, it is likely that the rouble will strengthen in the coming days. If oil prices continue to decline, it is possible that the rouble will weaken, but it will be at a much slower rate than in recent times. Why? Because we will implement foreign exchange intervention much more actively – again, according to the same rules that are set for floating exchange rates.

Dmitry Medvedev: I see. That is basically what we need to do. There can be different feelings on this, but nonetheless, there are set rules. The Central Bank shall be guided by them, including with regard to the exchange rate band. You say there is an increasing level of intervention, so, accordingly, where necessary, this should be the case. Of course, at the same time, we must keep an eye on the development of the overall economic situation, European markets and the trends in raw, i.e. oil prices. Alright. Thank you.

Адрес страницы в сети интернет: http://archive.government.ru/eng/docs/19119/