Putinomics Contra Glazyevnomics

Russian Economy Department

Sergei Glazyev called fair rate of the ruble
From: News Front, 26 March 2016, 13:49

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The purchasing power of one dollar is equivalent to about 23-25 rubles

The current rate of the national currency is underestimated almost three times the purchasing power of one dollar is equivalent to around 25 rubles, said on air “Russian news service” Advisor to the President of the Russian Federation on regional economic integration, academician Sergei Glazyev.

“Those are the assessments of the OECD – the organization for economic cooperation and development, it is statistics. Take a basket of goods in Russia and the USA, and see how many products you can buy at $ 100, suppose, in America, and how much you can buy in Russia from the same basket. Accordingly, it appears that the purchasing power of one dollar is equivalent to about 23-25 rubles. Is the data cross-country comparisons, a well-established technique used for over 50 years. And nobody here with these numbers does not argue,” said the economist.

In his opinion, in the current economic situation it would be reasonable from the Central Bank to fix the ruble exchange rate.

“The ideal would be to fix the exchange rate for a long period. But it needs to fix on a level that will ensure the competitiveness of the economy,” noted Glazyev.

He stressed that the level of fixation of the national currency should determine the Central Bank of the Russian Federation.

“The Central Bank limitless possibilities to stabilize the ruble exchange rate at different levels. But I would not be calling it to do at level 23-25. This should be done at the level of those vibrations, which were in the past two years – from 60 to 80. If the Central Bank after the collapse in December 2014 has fixed the exchange rate of the ruble to 80, we would today live with such a course without speculators, the economy would have adapted, competitiveness would increase, credit would go into import substitution”, – said the eye. (…)

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