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Russia brings forward shift to fully free floating currency – BTMU

FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Global Markets Research Bank of Tokyo-Mitsubishi UFJ sees the measures taken by CBR as a step in the right direction.

Key Quotes

“The Russia rouble remains stronger after the announcement yesterday from the CBR that it has abolished the exchange rate policy mechanism through cancelling the permissible range of the dual-currency basket rouble values and regular interventions on and outside the borders of this band. As a result the value of the rouble exchange rate will now be determined by market factors which should enhance the efficiency of the CBR’s monetary policy and ensure price stability.”

“The CBR acknowledged the deterioration in both the economic growth and inflation outlook in Russia. Real GDP is expected to expand by just 0.3% in 2014 and 0.0% in 2015, while inflation is expected to remain more elevated for longer at 8.2-8.4% in 2014 and 6.2-6.4% in 2015.”

“It remains to be seen whether the measures announced yesterday will help to lead to a more stable rouble but they appear to be step in the right direction.”

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