Central Bank on June's dollar rate drop

The decline in the US dollar rate against the ruble on the domestic currency market in June 2003 did not contradict rate policies of the Russian Central Bank, the bank's analytical survey "The Domestic Currency Market in June 2003" says. Supporting the stability of the real effective ruble rate, which had grown compared to December 2002 by 1 percent only, high profitability of export production, and stable GDP growth rate, the Central Bank focused on smoothing the rate dynamics and restraining an increase in money supply in June 2003.

In this period, the situation on the domestic currency market continued forming amid considerable foreign currency inflow, which did not decrease against May 2003, and the inflow of foreign credits to the companies of the real sector of the economy.

Early in June, the demand of banks for foreign currency surged against the background of an advance of available ruble resources. On June 3, the dollar rate went up to RUR30.75. But the Central Bank's entering the market and an increase in the inflow of foreign currency export revenues hampered a further rate growth, triggering a gradual decline of the dollar rate to RUR30.48 on June 9. A short-term rate correction to RUR30.57 on June 10 was followed by its further decrease due to exporters' mobilization of ruble resources for tax payments. On June 21 the dollar rate was RUR30.32. After this it fluctuated between RUR30.34 and RUR30.39. In June the dollar went down against the ruble by 1.1 percent. Since the beginning of 2003, it dropped 4.4 percent.

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