Russia to oust US dollar from nation's financial policy
02/07/2005 15:58
The majority of Russian people were saving their money in dollars
during post-perestroika years
The Central Bank of Russia has recently announced that the official
ruble rate will be calculated on the base of the dollar and euro cost.
A spokesman for the Central Bank said that the dollar-oriented
approach to the Russian currency policy is outdated. "Guaranteeing
stability to the dollar rate against the ruble was leading to
considerable fluctuation of the ruble and other foreign currencies,
including the euro," a statement from the bank ran. It is noteworthy
that the European currency has obtained stable positions both in the
Russian and in the world economy.
The Central Bank introduced the bi-currency approach to the financial
policy: from now on it will be oriented on the cost of the standard
value equal to $0.9 + 0.1. The ruble rate will stabilize against the
euro a little, whereas it will still fluctuate against the dollar.
When market members become accustomed to the novelty, the euro share
will be growing according to objects and needs of the state.
The majority of Russian people were saving their money in dollars
during post-perestroika years. Needless to say that the dollar has not
been doing at its best lately. Slowly but surely, the US currency has
been losing value after the crisis of 1998 - presumably because of
high oil prices. According to experts' estimates, the trend will be
preserved in 2005, if the USA does not take measures to cut budget
deficit. The euro, however, continues breaking all records, although
analysts did not lay much hopes on the European currency before.
It is not ruled out that the reform will exert a positive influence on
the Russian economy. The bi-currency approach will be capable of
regulating the financial market with the help of interest rates (as it
is practiced in all civilized countries) and use currency
interventions at a lower capacity. Common Russian citizens are not
likely to enjoy considerable changes for the better, though. If the
Central Bank of Russia continues backing the weak dollar, everything
will be left as it is.
Read the original in Russian: (Translated by: Dmitry Sudakov)
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