Russia Wants Ruble Fix Without Wrecking Inflation Targeting

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Russian officials are considering ways to keep the ruble on a tight leash without abandoning inflation targeting as they hunt for tools to tame the currency’s surge after sanctions ended the central bank’s ability to intervene directly, Bloomberg News reported. Rather than removing a commitment to target price growth, officials would need a new mechanism as long as sanctions on the central bank are in place, according to people familiar with the matter. Among other options being considered is a further loosening of rules on currency operations for companies active abroad and more access to foreign exchange for households and businesses at home, they said. The debate spilled into the public this week when First Deputy Prime Minister Andrey Belousov revealed authorities had discussed prioritizing economic growth and setting a goal for the ruble instead of inflation. The issue has taken on more urgency as the ruble surged to a seven-year high, increasingly posing a threat to exporters and public finances. In the view of some senior officials, Russia needs to devise alternative instruments that would help steer the ruble in a way similar to a system the central bank had in place until 2014, the people said, asking not to be identified because the information isn’t public. At the time, it used foreign reserves to manage currency swings within a corridor. Read more.
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