High Oil Prices: Government The Winner

October 2004 | Market Strategy

Despite the recent surge in rouble strength, First Deputy Governor of the Central Bank of Russia, Alexei Ulyukayev, has announced that his preference is for an exchange rate of RUB29.00/US$ as opposed to RUB28.76/US$ at present. The cost of the weak rouble policy, however, has been in higher inflationary pressures. The latest forecasts from the economy ministry suggest that CPI will be around 10.5% y-o-y in December, as opposed to the 10.0% target, in the best case scenario. This is based upon an expected 'pause' in industrial output growth in Q404, which has led the ministry to revise down its

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