Putin seeks to calm markets and businesses as ruble roils wartime economy (Europa Press)
The Russian President, Wladimir Putinstated that Russia is currently steering clear of extreme measures in response to the crisis economic turmoilin an attempt to send a message of calm after the sharp devaluation of the ruble highlighted his country’s vulnerability to the financial shocks resulting from the war in Ukraine.
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Speech at an investment forum on Tuesday ahead of his summit with the North Korean leader Kim Jong UnPutin said Russia could handle the situation without resorting to stricter capital controls or confiscating private assets. As Putin spoke, the ruble reduced its rise against the dollar, but remains on track with gains for the third straight day.
Despite the ruble’s brief plunge last month and subsequent volatility, the currency’s fluctuations are “manageable,” Putin said at the opening session of the annual economic forum in the Russian Pacific port city of Vladivostok. At the same time, exporters have been “limited” to generate revenue from abroad, which has reduced the supply of foreign exchange, he said.
Putin claimed that ruble fluctuations were “manageable” (AP)
When asked whether the state could take control of private assets, Putin ruled out “deprivatization.”At the same time, he warned that prosecutors are “actively collaborating in certain areas and with certain companies,” which, in his opinion, does not amount to nationalization.
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This year, Russia seized the local operations of several international holding companies, including the French one Danone and the Danish Carlsberg. Last month, Russian prosecutors also targeted the billionaire Andrey Melnichenkoone of Russia’s richest men, with a lawsuit related to the sale of an energy plant five years ago.
The resistance of the economy to it international sanctions The invasion hides an accumulation of stresses emanating from the invasion Record shortage of workersHe Deterioration in trade and that Exchange rate volatility.
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Meanwhile, the Kremlin’s campaign to increase military conscription threatens to hamper the economic recovery by cutting the workforce.
In his speech on Tuesday, Putin did not directly say whether a re-convocation was possible, but praised those he had called up “real men” who voluntarily join the fight. Russia spoke up 270,000 people in the last six or seven months, adding to the 300,000 previously mobilized, he said.
Putin refuses to stop his campaign to increase military recruitment even though it threatens the country’s economic recovery (EFE)
“People consciously sign up for military service under current conditions, knowing that they will end up at the front,” he added. The arrival of Western weapons such as F-16 fighter jets in Ukraine would only prolong the conflict without changing the balance on the battlefield, he said.
Despite Russia’s growing dependence on trade with Asia, this year’s event in Vladivostok reflects the country’s isolation, with the vice president of Laos as the most prominent guest during a plenary session with Putin. Chinese Vice Premier Zhang Guoqing He also attends the forum and met with the president on Tuesday.
Putin explained this Russia’s cooperation with China has reached “unprecedented levels.” and expects bilateral trade to reach $200 billion this year.
The move to conduct trade in currencies other than dollars and euros has also reduced the flow of hard currency into Russia, just as the value of revenue from energy exports has plummeted as imports recover.
Putin celebrated that Russia’s cooperation with China had reached “unprecedented levels” (Portal)
Russia is divided on the issue of capital controls but is under less pressure to resort to currency restrictions as the ruble shows signs of stabilizing after emerging markets’ third-largest devaluation this year.
“We must somehow reach an agreement with companies: they must understand and assume that it is safer to work here,” Putin said. “You don’t have to do anything drastic.”.
As promised, Putin’s conciliatory tone on economic policy also extended to other issues do not impose taxes on companies and said that those who fled Russia are welcome and need not fear punishment.
Citing anti-war statements by businessmen such as Yandex founder Arkady Volozh, Putin said the convictions were an attempt to protect his assets abroad. Putin called Volosh, who recently denounced Russia’s invasion as barbarism, a “gifted” businessman and wished him good health.
At the same time, Putin made it clear that his courting of companies has limits, warning authorities such as the prosecutor’s office and the top investigative agency that “they will continue to closely monitor what is happening, including in the economic sphere, to make sure that this is the case.” Everyone obeys Russian laws.”
“No one will be harassed, but everyone must obey the laws of Russia” held.
Despite a conciliatory tone, Putin declared that “everyone must comply with Russia’s laws” (Portal)
Putin had previously called for measures to control the outflow of capital from Russia and reduce volatility in financial markets, warning of the danger of rising prices after the fall of the ruble.
When the ruble came under strong selling pressure in August, the central bank announced that it would not buy foreign currencies for the rest of the year and then significantly raised interest rates in a crisis meeting.
Putin said the central bank was “forced” to order the sharp interest rate hike due to inflation risks. “I think he did the right thing at the right time,” he said.
(© 2023, Bloomberg)