Thursday, December 18, 2014

Putin says Russian economy will rebound (economic downturn will last two years at most)

Russian President Putin has attempted to assuage fears of economic collapse and promised rapid recovery as he faced hundreds of journalists amid the worst financial crisis of his rule.
Speaking at his annual press-conference on Thursday, the Russian leader said that the economic downturn will last two years at the most and he promised to support the poorest segment of the population.

"Under the most unfavourable world conditions, such a situation can last two years," Putin said days after the Russian rouble fell to record lows, following a 60 percent dive in value since the beginning of the year.

He added that efforts by the central bank and government have been "absolutely reasonable and in the right direction" though they could have come quicker.
Russian authorities have made a record hike of the key interest rate in the country and spent billions to stabilise the rouble.
"It goes without saying that a way out of this situation is inevitable," he said, promising to "focus attention on helping people who need it most".

Rouble rallies
The Russian president had remained silent earlier this week on the issue of the rouble's crash, which took it to historic lows of 80 to the dollar and 100 to the euro, leading Russians to rush to exchange their savings and make a run on stores to dump the devaluing national currency ahead of expected price hikes.
The rouble rallied in early trading on Thursday ahead of the news conference.
The central bank earlier this week spent $2bn on supporting the currency and the finance ministry promised to spend up to $7bn more.

  • The marathon press conference, held in a trade centre in central Moscow, saw Putin face hundreds of journalists from all over Russia. Over 1,200 had signed up to attend, according to the Kremlin.

Economy minister Alexei Ulyukayev told Vedomosti, a Russian daily newspaper, in an interview published on Thursday that Russia's economy was going through a "crisis" and conceded that there was no coherent plan on how to tackle it if oil prices do not rebound.

Putin's ratings so far remain sky-high, hitting 80 percent for months after the controversial annexation of the Crimea peninsula from Ukraine in March.

1 comment :

  1. Belarussian President Alexander Lukashenko has demanded that Belarus's transactions with Russia be settled in dollars or euros because of the slump in the value of Russia's ruble, the official news agency Belta reported Thursday....

    The Russian ruble suffered its largest intraday loss since 1998 on Tuesday and its weakness poses a threat to the economy of Belarus, a close ally whose main trading partner is Russia.

    "We're going to trade not in rubles, but in dollars," Belta quoted Lukashenko as saying. "We should have long ago demanded Russia pay us also in hard currency."

    The currency plunge combined with low oil prices, looming recession and Western sanctions over the Ukraine conflict have left Russia facing a financial crisis.

    The eccentric leader, who has occasionally made remarks critical of Russian policy despite the economies of the two countries being closely intertwined, expressed concern about the turmoil on the Russian market.

    "We're not going to run after Russia. This is categorically forbidden because it is not clear what's happening on the Russian market," he said.

    He said Belarus would not devalue its own ruble over the weakness of the Russian currency.


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