Today, Russia’s parliament is busily engaged in addressing the serious matters that the nation’s economy faces, with a press conference being staged by President Vladimir Putin at the Moscow World Trade Center, along with more than 1200 attendees.
At the conference, Mr. Putin will address mainstream media, and answer the questions which relate to the current situation. The conference will last most of the duration of today, however LeapRate was able to establish certain important factors relating to Mr. Putin’s perspective on currency trading.
The first several minutes of the press conference were devoted to the president’s comments on the current economic crisis in Russia, with the main topic being the Ruble exchange rate and the measures taken to stop the Ruble decline.
Russian President Vladimir Putin has today given an address to the public with regard to the current economic woes which Russia faces, which have resulted in interest rises to 17% and liquidity shortages in the nation’s sovereign currency, the ruble.
Yesterday, several FX companies, executing venues and institutional liquidity providers took cautious measures in mitigating potential exposure caused by the sharp fluctuations and downward direction of the ruble, which ranged from limiting the maximum leverage allowable to very low levels, to temporary suspensions of trading in ruble pairs.
The outcome of today’s address by President Putin contained some factors which are indeed noteworthy, one of which is that Mr. Putin placed the blame on external factors for what is happening to the Russian currency market, especially the falling price of crude oil and gas.
He backed the measures taken by the Central Bank and the government to halt the Ruble slide, calling them adequate. The single aspect that Mr. Putin had the tenacity to to criticize was the timing of these measures. He mentioned that steps such as the interest rate hike could have been made earlier.
He underlined that it is possible to retain the gradual improvement in the Ruble exchange rate against the US dollar and the EUR that has been seen last night and earlier today.
Mr. Putin made a bold claim that the exit from the current economic crisis is inevitable. His statement was bold indeed in suggesting that in the worst-case scenario this improvement will be seen within two years. Regarding the key interest rates, Mr. Putin said he believed they will not remain so high for a long time.
Furthermore, Mr. Putin stressed that there has been substantial growth in currency reserves of the Central Bank and the government over the past year, but said these institutions would not be “burning” (spending carelessly) these reserves to support the Ruble.”
The address concluded with a question from a representative of Russian information agency Novosti: “Will you name the currency speculators that you said were responsible for the present Ruble crisis?”
“I will not. “Currency speculation” is not a term used in the criminal code and does not involve penalties. Currency speculators are participants in a normal market economy.”
“We will not be forcing anyone to sell their foreign currencies or profits denominated in foreign currencies” stated Mr. Putin. “There will be no directives and orders to sell foreign currencies in Russia.”
This is a very interesting matter, following yesterday’s report by LeapRate that senior Russian law maker Alexander Bastrykin, the head of the Investigative Committee, had stated that Russia is considering punishing currency speculators, with Mr. Putin having stated at the time that the tools and instruments are available to do so, and that he would put them to use.
“I am not aware of any plans by the Bank of Russia to implement stricter measures, like fixing the Ruble exchange rate” concluded Mr. Putin.