Putin called for a timely response to the weakening of the ruble

The weakening of the ruble has become the main fact in accelerating inflation in Russia; it is important to clearly understand the reasons for this and promptly make “appropriate decisions.” About it told Russian President Vladimir Putin at a meeting on the draft federal budget for 2024–2026.

“Of course, it is obvious that now one of the main problems is related to the acceleration of inflation. The main factor here is clear – the weakening of the ruble, and it is necessary to clearly understand its reasons and make appropriate decisions in a timely manner, without delay,” said the head of state.

At the same time, Putin expressed confidence that the government and the Central Bank will work in a coordinated and professional manner on this issue.

On September 15, the Central Bank raised the key rate by 1 percentage point to 13%. This is the third consecutive rate increase in a month and a half: first, the Central Bank raised the rate at a meeting on July 21 by 1 percentage point to 8.5%, and then unscheduledly increased the rate on August 15 immediately to 12%.

At a press conference, Central Bank Chairman Elvira Nabiullina noted that the sharp movement of the exchange rate in itself was not a risk to financial stability, but it caused an additional increase in inflation and inflation expectations. “It is to mitigate these factors that we increased the key rate,” she explained. According to Central Bank estimates, a 10% weakening of the exchange rate results in 0.5–0.6 percentage points in inflation.

Since the beginning of 2023, the value of the dollar and euro against the ruble has increased by 38.5% – to 96.81 rubles/$ and 102.93 rubles/euro, respectively, as of September 15. According to the updated forecast of the Ministry of Economic Development, in 2023 the average annual exchange rate is expected to be 85.2 rubles/$, in 2024 – 90.1 rubles/$.