“Russia’s government clashed with the central bank over its reluctance to stimulate the country’s sagging economy, with President Vladimir Putin urging an evaluation of both fiscal and monetary measures to boost growth.
Bank Rossii has “all the necessary grounds” to signal a future cut in borrowing costs, Finance Minister Anton Siluanov said yesterday and Deputy Economy Minister Andrei Klepach said monetary stimulus was “essential.” Easing policy would be “counterproductive,” said Alexey Ulyukayev, the central bank’s first deputy chairman.
“We should analyze whether we have really exhausted these measures’ potential in this situation, or whether, given the European recession, it still makes sense to keep doing something to stimulate demand using budget or monetary-policy measures,” Putin said in Moscow yesterday.
Economic growth in the largest energy exporter has decelerated to the weakest pace since a recovery began in 2010 as weakening demand from China and Europe hurts exports. The slump is challenging Bank Rossii Chairman Sergey Ignatiev, whose final term expires in June.
The benchmark Micex Index (INDEXCF) traded 0.4 percent higher at 1,521.16 at 2:21 p.m. in Moscow. The ruble was little changed at 30.3005 per dollar against the dollar and slid 0.4 percent to 40.4595 against the euro. Non-deliverable forwards, which provide a guide to expectations of currency movements, showed the ruble at 30.7140 in three months….”
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