The Ministry of Finance: stabilization in oil prices led to lower volatility in the exchange rate

The Ministry of Finance: stabilization in oil prices led to lower volatility in the exchange rate


KRASNOYARSK, February 20. Stabilization of oil prices around $30 per barrel has reduced the volatility of the exchange rate of the ruble, told reporters Deputy Minister of Finance Maxim Oreshkin on the sidelines of the Krasnoyarsk economic forum.

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The Deputy head of the Ministry of Finance of the Russian Federation Oreshkin: the phase of low oil prices could last up to 15 years

“You cannot expect at any given time, without changes in the external environment will be a significant change in market dynamics. We see it for ourselves in recent weeks that a certain stabilization of oil prices near $30 per barrel has led to a stabilisation of the exchange rate,” he said.

The fall of the ruble began in the second half of 2014, while from June to December, the Russian currency has fallen against the dollar by 2.2 times. Then in 2015 amid falling oil prices, the ruble fell against the dollar by 31%, to Euro – by 17%. Since the beginning of this year, the dollar rose against the ruble by another 4.6% to 77 rubles, and Euro – by 7% to 86 rubles.

In turn, the price of Brent oil has fallen from highs of the summer of 2014 to date, by 70% to $33 per barrel. Only since the beginning of this year a barrel of Brent fell by 13%.

About inflation

The Ministry of Finance does not consider it appropriate to transfer the Central Bank target inflation at 4% in 2017 to a later date, said Oreshkin. “Absolutely not. The Central Bank has been very clear about its determination to reach this target, and here we are in this matter completely support it,” he said.

He explained that in the Ministry of Finance projected in 2016 the inflation rate at 7.5-8% adverse impact of currency revaluation of the ruble due to the fall in the oil price from $50 to $30 per barrel at the end of last year and early this year.

“So, actually, visually it seems that the value of inflation is significantly higher than the target of the Central Bank. In reality, there are no significant differences,” – said the Deputy Minister.

Oreshkin added that from the point of view of fundamental factors he does not see risk of default by the Bank of Russia target indicators on inflation in 2017.

About the administration of insurance premiums

Transfer of administration of insurance premiums from the Pension Fund of the Russian Federation to the Federal tax service is not a matter of 2016, said Oreshkin.

“The transfer process is not a matter of 2016. 2016 is the issue of training transfer process in which we are engaged. But from the point of view of the effect on the budget is 2017 and subsequent years,” he said.

Oreshkin added that in connection with the transfer of the administration will increase the budget revenues due to the lack of growth in arrears. According to the Deputy Minister, in the first year after the transfer of the administration to be in the tens of billions of rubles, but the specific numbers he never called.

The mechanism of convertible bonds

The mechanism of convertible bonds is not considered as a priority tool of privatization deals, said Maxim Oreshkin.

Earlier, Finance Minister Anton Siluanov said that the Finance Ministry is studying the mechanism of convertible bonds under the privatisation transaction, this involves the issuance of bonds in privatiziruemih shares with a term of 3-5 years.

“Is regarded as one of the possible options, but this tool has many negative characteristics. This tool in less developed and as never been used, unlike other methods of privatization,” said Oreshkin, not adding any negative characteristics involved.

Earlier, the Finance Ministry explained that this mechanism has several advantages. The essence of the mechanism lies in the fact that at stake in the privatized company issued bonds with a price greater than the package, with subsequent repayment of the bonds or the value of these bonds after 3-5 years, respectively the owner of these bonds. This scheme will reduce the risks for investors.