Ruble's strengthening unavoidable

Russian Finance Minister Alexey Kudrin believes that an annual 2 to 4 percent strengthening of the ruble is unavoidable. According to the minister, the Russian government does not need to fight natural and objective tendencies of the ruble's strengthening. He added that the strengthening of the payment balance was unavoidable with the advance in the share of the machine building production and investments in the Russian economy, even not taking into account oil prices.

Kudrin mentioned that the strengthening of the real ruble rate was planned at 4 to 6 percent this year. Inflation is to be 10 to 12 percent in 2003. He reiterated that the 2003 budget envisaged oil prices at $21.6 per barrel, while they had already exceeded $26 per barrel. So, the minister expressed hope that all planned macroeconomic parameters would be achieved this year. The minister also added that the Finance Ministry would submit its proposals on withdrawing excessive money supply from the economy to the government today. These instruments "are sensitive to the market and they will not be announced", Kudrin said.