Experts Remark On Fast Rise In Dollar Rate

Over the past four business days, October 24, 25, 26, and 29, the dollar exchange rate rose by 14 kopecks, from 29.54 to 29.68 rubles per dollar. Such sharp increases in the dollar rate had not been observed since the middle of February 2001, i.e., for over 8 months. In an interview with RBC, several analysts and experts of commercial banks linked these events to a rather high level of inflation, as a result of which the rate of growth in consumer prices in the country in 2001 will be much higher than the government's initial estimate of 12-14%. The experts remark on a relatively recent statement by Russian Central Bank Chairman Viktor Gerashchenko that the rate of the decline of the ruble against the dollar is substantially lower than the inflation rate, which is undesirable in the future. Moreover, the Central Bank chairman has broadened the limits for a possible fall in the ruble exchange rate by pointing out that the dollar rate would not surpass the level of 31 rubles per dollar before the end of this year. To all appearances, the management of the Central Bank has moved from comments to action recently, substantially limiting the Central Bank's presence on the currency market and not using large-scale interventions to support the ruble, as was done earlier. Under these circumstances, the dollar rate may reach the level of 30.5 ruble per dollar by the end of the year, even if it does not surpass the limit of 31 rubles per dollar.

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