The ruble’s advance this year places it among the five best-performing global assets by spot return after platinum, silver, palladium and gold, according to data compiled by Bloomberg.
For the central bank, a stronger ruble is welcome in the fight against inflation, and Governor Elvira Nabiullina has signaled that the disinflationary effect hasn’t yet been exhausted. But economists at the Moscow-based Stolypin Institute for the Economy of Growth warn that the appreciation is increasingly turning into a threat.
If current trends persist — a firmer ruble combined with expensive credit — a cooling of the economy may soon give way to stagflation, they said in a report this month. The central bank forecasts the economic expansion to slow this year to 0.5%-1% from 4.3% last year.
An overvalued ruble undermines competitiveness, the Stolypin researchers wrote, arguing that Russia is effectively “losing its natural advantages as an energy power, offering foreign consumers better conditions than domestic producers and worsening the country’s investment appeal.”
A weaker ruble would benefit not only exporters and the budget, but “the entire economy,” Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs, told local media outlet RBC on Tuesday. The lobby group is due to meet with President Vladimir Putin on Wednesday to discuss economic issues among other things.