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Sunday, February 18, 2018

Putin discussed the necessity of weakening of the ruble with the government behind closed doors

The meeting of Vladimir Putin with government members in the Kremlin, almost left no doubt that the authorities intend to “delete” inappropriately strengthened the ruble. Coming from the President, the Minister of industry Denis Manturov and the Minister of agriculture Alexander Tkachev responsible for import substitution and export, stated that both of these very important state task is impossible to decide if the dollar will cost less than 60-65 RUB.

photo: kremlin.ru

The main theme of the traditional meeting with the President were the results and prospects of import substitution. The President reminded that 2.5 years ago due to “known restrictions of a political nature” in Russia has opened “a unique window of opportunity” for the development of a range of industries and sectors, and she successfully used it. In a relatively short period of time, the share of domestic products on the market of transport engineering has reached 100%, and in the oil and gas industry exceeded 50%.

“The increase in the consumption of pork imports fell by about a third, and imports of poultry meat doubled. All busy domestic products”, – noted with satisfaction the President.

Now, according to him, it’s time to discuss the new “reasonable steps” that will allow them to make similar progress in other sectors. The producers must realize that state support of projects of import substitution is not unlimited, and their products must meet international quality standards to compete successfully in foreign markets.

“The challenge is not to import everything and everyone, and to increase the export potential of Russian companies,” Putin said, drawing the attention of Ministers to the inadmissibility of creating “greenhouse conditions” for individual market participants.

Government, he said, can “lean” only in the initial phase of new projects. In the future, their success must depend on the responsibility and competencies of managers, and not from unreasonable preferences.

Vladimir Putin remained true to his promise


and in the presence of the cameras not a word is said about the impact of import substitution and export of the national currency. However, behind closed doors, as it turned out, only talked about it.

-We have 900 new projects of import substitution on the way, told reporters after the meeting, Denis Manturov, But that they could get started, we need stability on the course. This initiative is supported by all manufacturers.

A few leading questions to clarify the situation: stability, according to the Minister, is not in the current quotes, and God forbid, not in further strengthening of the ruble, but rather in its weakness.

– Rate of 55-56 rubles doesn’t suit us (today’s exchange rate — 56,31 rubles per dollar “MK”), it will be rolled back, – supported his colleague Alexander Tkachev, – last year we on the export of agricultural products earned $17 billion, and at current rate will get minus $3 billion is a serious blow to agriculture. All have become accustomed to good profitability in the sector.

After some hesitation the Minister of trade and industry admitted that the best for the industry would 58-59 per dollar (“All that tight, it becomes inefficient for enterprises”). While farmers, according to Mr. Tkachov, less than 60-65 rubles disagree.

“With this rate we could reach new horizons, to conquer new markets, successfully competing with Ukraine, Romania and Bulgaria” – a tongue Twister said the Minister, leaving no doubt that these arguments have already been presented to the President.

– Do you think that you, the people, need a strong ruble? – suddenly asked the journalists Denis Manturov, – You think will be cheaper products?

This, of course, no one thought, and the Minister readily confirmed: “Nothing like this”.

Manturov said that the stabilization of the ruble (i.e. it is weak) in fact, the interests of all participants of economic activities. And not the participants too. This will allow companies to consistently pay taxes and raise wages, and the state to fulfill its obligations to state employees and retirees.

– Look at China! he said, – there is no miracle! They are 20 years gradually reduced the price of its yuan, to achieve such results.

And although the Ministers did not reveal the master secret is exactly how the government is going to “drop” the ruble (the day before the President promised that non-market mechanisms will not be applied), doubts practically does not remain: the Russian economy registered “Chinese recipe” for recovery.


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