CBR Prepares for Further Expansion of Bi-Currency Basket’s Corridor
OREANDA-NEWS. December 15, 2008. CBR is prepared for further expansion of the bi-currency basket’s corridor, within which the ruble exchange rate is regulated, first deputy CBR chairman Alexey Ulyukaev noted Saturday. "We won’t let the ruble go into free fall, but will apparently take some steps to broaden the limits of the bi-currency basket" – he said. Ulyukaev pointed out that since September the ruble’s exchange rate has already declined 10% as this range is widening. "This is such a quasi-free and semi-free float" – he said. Starting this September the Bank of Russia has regularly increased the corridor of the bi-currency basket six times by approximately one percentage point.
In December alone CBR widened twice by 1% the corridor against the bi-currency basket (USD 0.55 and EUR 0.45), with the latest move occurring last Thursday. Ulyukaev shares the viewpoint that a sharp change in the ruble’s exchange rate would help save huge amounts from the country’s international currency reserves. However, he thinks CBR should also pursue another target, i.e. "to give time to households and businesses to settle their financial issues". "It’s inadmissible to allow panic when people take hasty decisions" – the first deputy CBR chairman said explaining the reasons for the policy aimed at gradually broadening the bi-currency basket.
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