The ruble\u2019s 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.<\/p>\n
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\u2019t 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.<\/p>\n
If current trends persist \u2014 a firmer ruble combined with expensive credit \u2014 a cooling of the economy may soon give way to stagflation, they said in a\u00a0report\u00a0this month. The central bank forecasts the economic expansion to slow this year to 0.5%-1% from 4.3% last year.<\/p>\n
An overvalued ruble undermines competitiveness, the Stolypin researchers wrote, arguing that Russia is effectively \u201closing its natural advantages as an energy power, offering foreign consumers better conditions than domestic producers and worsening the country\u2019s investment appeal.\u201d<\/p>\n