Dollar loses 8% over 11 months

At 11:30 Moscow time, the weighted average dollar exchange rate with tomorrow settlements amounted to RUR29.55, driving the official dollar rate for December 9 downwards by RUR0.08. In the aggregate, on December 5 and 8 the dollar lost as much as RUR0.15, and RUR2.33 (i.e. 8 percent) over the past 11 months. The current dollar rate is equal to the one of October 19, 2001, which is over 26 months ago. This development was due to the fact that in the second half of 2003 the pace of ruble growth increased dramatically compared to the first half of the same year.

Meanwhile, presidential advisor Andrey Illaryonov has been expressing concerns about this course of events for quite a long time now. On December 4, he reconfirmed his view against solidifying the ruble anymore. Illaryonov specified that over the past 5 years the real effective ruble rate had stepped up 50 percent. "The most mysterious thing of this year was an inexplicable tenacity in pursuing a policy of increasing the ruble rate", the advisor said. Illaryonov stressed that the strengthening of the ruble was decreasing the competitiveness of Russian goods and services.

It is worthy to note that in late November Deputy Economy Minister Arkady Dvorkovich said that this year the strengthening of the ruble against the dollar might exceed the planned 10 percent. According to the Russian Central Bank, the ruble rate rose 13.3 percent over the first ten months of 2003.