MOSCOW, March 23 (Reuters) - The Russian rouble is “somewhat overvalued”, a senior member of the economy ministry said on Thursday, in the latest verbal intervention by a Russian official against the currency.
The free-floating rouble has firmed 6.5 percent so far this year to 57.6 against the dollar, posing a problem for the Russian government, whose budget revenues from oil exports shrink when the rouble strengthens.
Speaking in the upper house of parliament, the head of macroeconomic analysis and forecasts at the economy ministry, Polina Bagdasen, said the rouble’s recent recovery was driven by temporary factors.
Demand for emerging market assets and seasonally favourable balance of payments have pushed the rouble up, Bagdasen said.
Earlier this month, Bagdasen’s boss, Economy Minister Maxim Oreshkin, said the rouble was stronger than its fundamentally justified levels.
Finance Minister Anton Siluanov also said this month that the rouble was overvalued by up to 12 percent, putting short-lived downside pressure on the currency’s exchange rate.
Siluanov’s words contrast with those of the central bank, which claims it has no specific target rate for the rouble, as it is driven solely by market factors.
While the stronger rouble deprives the finance ministry of extra revenues for the budget, it helps annual inflation slow towards the central bank’s target of 4 percent by the end of the year.
Bagdasen said the stronger rouble also helps Russian companies increase capital investment and modernise their equipment and production, which should boost the competitiveness of Russian firms in the middle and long term.
After firming by 20 percent versus the dollar in 2016, the rouble is still much weaker than it was before Moscow’s annexation of Crimea in 2014 and a rapid drop in oil prices. (Reporting by Elena Fabrichnaya; Writing by Andrey Ostroukh; Editing by Toby Davis)