Russian Finance Minister Believes Higher Euro Rate is No Threat to the Russian Budget

The strong euro led to more foreign payments to the tune of 400 million dollars last year, Vice-Premier and Finance Minister Alexei Kudrin reports.

Unlike euro pessimists who expect inflation due to the higher rate of the euro against the dollar, Kudrin believes that the higher euro poses no threat to the Russian budget.

The Minister is confident that the higher exchange rate of the euro on the world currency market is doing no wrong to the Russian economy.

"Inflation won't surge above the planned figure," the Finance Minister said in an interview with Rossiiskaya Gazeta published on Wednesday, February 5th.

The Vice-Premier thinks that the weakening of the dollar is linked to the US economic recession which turned out to be a little deeper than expected.

"The US economy is on the downside now, while the European economy is performing a little better. So, I don't think that the strength of the euro can be accounted for by a more important role this currency can play in the global economy, as some analysts believe," Alexei Kudrin said.

He went on to say that Russia is now turning to the single European currency, but the process is slow, so the dollar remains the main savings unit.

If there is no force majeure, no significant changes of currency exchange rates can be expected on the currency market in the foreseeable future, Alexei Kudrin said.